Apollo, Diameter closed shorts on auto-parts firm First Brands

Apollo, Diameter closed shorts on auto-parts firm First Brands

Auto-parts manufacturer First Brands Group has seen a significant shift in its financial landscape as Apollo and Diameter closed their short positions on the company. This move comes amidst ongoing discussions between First Brands and its creditors regarding the company's $6 billion debt pile, which has paused a refinancing attempt for over a month .

First Brands has retained legal firm Weil Gotshal & Manges and investment bank Lazard Inc. to explore financing options, while some of its largest lenders are working with Gibson Dunn & Crutcher and Evercore Inc. . The company paused its refinancing efforts following investor requests for a quality of earnings report. Management has indicated it will consider options such as raising preferred equity to address the debt situation .

The latest development in First Brands' financial situation has led to a notable change in its debt valuation. A $2 billion loan due in 2027 was quoted between 57 cents and 62 cents on the dollar, down from the mid-80 cents to end last week .

Meanwhile, RWE AG, a European energy company, has seen a positive outlook from Berenberg, which maintained its Buy rating and price target following Apollo's joint venture with the company . The joint venture, Amprion, includes a €3.2 billion cash injection from Apollo, unlocking approximately €2.6 billion of debt headroom for RWE. This additional headroom will fund future investments and reduce RWE’s net interest costs in the near term .