Credit-focused hedge fund firm Daimeter Capital Partners and private investment firm Apollo Global Management haver closed short positions against the debt of First Brands Group, the heavily leveraged US auto-parts maker, according to a report by Bloomberg.
The report cites unnamed people familiar with then after as revealing the development after First Brand’s borrowings have come under intense pressure in recent weeks. The firm’s loans collapsed amid growing scrutiny of its receivables financing and balance sheet transparency, with its $2bn term loan due 2027 falling from above 90 cents on the dollar to below 50 cents within days — one of the sharpest loan selloffs seen this year.
The Michigan-based manufacturer, which owns brands including Trico wiper blades, Carter fuel pumps and Fram filters, is working with advisers to address its $6bn debt load, Bloomberg reported. The firm halted a planned refinancing earlier this summer after lenders raised concerns, instead launching a quality of earnings review.
The turmoil has drawn negative commentary from Moody’s Ratings, which flagged the company’s actions as credit negative, while investors scramble to understand its true financial position.
First Brands is privately owned by businessman Patrick James. Apollo, which acquired a minority stake in Diameter in 2022, and Diameter itself both declined to comment. First Brands did not respond to requests for comment.
Founded in 2017 by Scott Goodwin and Jonathan Lewinsohn, Diameter has built a reputation in public and liquid credit markets while expanding into structured credit, dislocation funds and private lending. Apollo, meanwhile, has been a prominent player in distressed and opportunistic credit, including short positions on troubled borrowers.
