Case Study
First to Know, First to Report: First Brands
When it comes to rapidly evolving situations like First Brands Group, you know Octus has been breaking the latest developments and providing context and clarity with deep legal and financial research all along the way.
The full story, from every angle
Octus’ coverage of the auto suppliers’ decline has spanned nearly half a decade and, in the course of 2025 alone, has provided leading insights including:
Octus Credit Intelligence
Market-moving news from the Octus Credit Intelligence reporting team on the company’s paused refinancing efforts, advisor engagements and all the steps along the way to their September 29th Chapter 11 filing.
Private Company Analysis
Incisive financial research from our public and private financial analysts:
The Private Company Analysis team flagged the company’s substantial working capital financing, poor quality of EBITDA, and weak corporate governance—all issues that have contributed to the unravelling of the situation.
Octus Covenants Analysis
Deep legal analysis of the company’s loan documents from the Octus Covenants Analysis
All along the way, Octus’ coverage of First Brands has kept subscribers informed and moved the market. And, as the next stage of First Brands’ journey begins, know that the Octus team will be providing updates and context from the courtroom, the boardroom and beyond.
First Brands TL Price (Octus)
Background
First Brands Group is a premier automotive aftermarket platform offering comprehensive solutions for consumable maintenance and mission-critical repair parts under a portfolio of leading brands.
2022
April
In April 2022, S&P upgraded First Brands to ‘B+’ following strong 2021 outperformance, reflecting successful integration of three large acquisitions completed during 2020 and effective restructuring actions.
2023
January
In January 2023, the company launched a $250 million incremental first lien term loan for acquisitions, priced at S+500 bps with 1% floor and 96 OID, maturing March 30, 2027.
2024
March
- By March 2024, First Brands had increased total funded debt by over 60% to approximately $5 billion, with all debt exposed to floating rates.
- In March 2024, the company allocated a $525 million fungible first lien term loan at 99.25 OID and EUR225 million at 99 OID to refinance existing debt and fund the Factory Motor Parts Group acquisition.
October
In October 2024, First Brands launched additional term loan add-ons of $150 million and EUR100 million at 98 OID for future M&A and operational support.
2025
April 23 | Private Company Analysis initiation
Private Company Analysis published a deep dive 30-page primer on First Brands as loans dipped into the 80s during the liberation day sell-off.
The focus was a 360 analysis of the auto parts manufacturer and supplier with a focus on scrutiny of tariff impact. Key risks flagged included:
- Extremely heavy reliance on factoring and supply chain financing exposing the company to liquidity issues should the arrangements be withdrawn or normalized to industry levels.
- Continued poor quality of earnings with large acquisitions, “non-recurring” recurring costs, and addbacks that do not deserve to be credited according to our view. Margins significantly wide of peers also raise eyebrows. According to Octus’ analysis, “the company’s historical margins appeared significantly higher than those of publicly traded peers, which we believe may not accurately reflect the company’s true profitability because of weak corporate governance and limited transparency.”
- The Octus Private Company Analysis continued: “First Brands exhibits weak corporate governance, with the founder-CEO, Patrick James, maintaining what appears to be absolute control. There is limited to no public background and no disclosure of a board of directors or any corporate oversight from a board of directors. Without support from a financial partner, there may be limited capacity to inject additional equity if needed in a distressed situation such as a recession, a destocking cycle or the factoring lines being reduced or pulled. James may do whatever it takes to retain control, such as adding debt, dropdown transactions or selling key assets, which might be detrimental to the company’s current creditors.”
May 14 & May 22 | Private Company Analysis earnings coverage
Private Company Analysis published a memo on Q1’25 earnings and investor call of First Brands.
July 9 | Reporting on potential amend & extend
Octus reporters broke the news that First Brands had begun discussions with existing lenders about restructuring its capital. The financing, led by Jefferies, was reported to include a $2.7 billion first lien term loan, €850 million first lien term loan, and a $1 billion first lien fixed-rate tranche, with discussions on their second-lien term loan ongoing.
July 24 | Private Company Analysis, Covenant Analysis provide refinancing updates
Private Company Analysis published an update of the First Brands analysis and model following the refinancing launch. Covenants Analysis completed an analysis of the documentation for First Brands’ new loans, identifying middling borrower flexibilities and lender protections in loan documents.
August 4 | Reporting on refinancing pause
August 14 | Deloitte hired to conduct quality of earnings report
Octus reported that, after the failure to refinance resulted from investor skepticism about the company’s financial disclosures, particularly regarding its accounts receivable factoring programs. The company hired Deloitte to conduct a quality of earnings, or QoE, report to address these concerns—a red flag that suggested deeper accounting issues.
August 15 & August 29 | Private Company Analysis earnings coverage
Private Company Analysis published a memo on Q2’25 earnings and investor call of First Brands.
September 18 | Private Company Analysis publishes analysis of First Brands working capital arrangements versus the rest of the industry
Private Company Analysis published out a market update on First Brands, providing working capital benchmarking with peers, given the company’s use of factoring arrangements and the broader market concerns.
September 17-24 | Restructuring reporting
- September 17: Octus was the first to publish that First Brands was working with Weil Gotshal and Lazard to evaluate its options.
- September 18: Octus broke the news that First Brands was considering a restructuring and debating whether it would be in- or out-of-court. Additionally, Octus reported that several of their term loan lenders went restricted, an ad hoc group of lenders was being formed, with Gibson Dunn as legal advisor and Evercore as their financial advisor.
- September 19: Octus reported that First Brands was working with Alvarez & Marsal as financial advisor. After this tumultuous week, First Brands’ loan dropped significantly, from the mid-80s to the mid-50s.
- September 23: After reporting that First Brands’ restructuring risk would impact over $2.6B of CLO holdings, across 79 managers, Octus shared the scoop that advisors to First Brands Group’s lenders–Gibson Dunn and Evercore–hosted a call to discuss a debtor-in-possession loan, where lenders, including those with exposures of more than $100 million, discussed providing the loan on a pro rata basis.
- September 24: First Brands loans continued to fall, dropping into the low 40s.
September 25 | Related entities begin seeking bankruptcy protection
- Several entities related to First Brands Group filed for Chapter 11 bankruptcy in the Southern District of Texas. The bankruptcy petitions were filed by Carnaby Capital Holdings and its affiliates, all signed by First Brands Group’s founder and CEO, Patrick James. The petitions did not explicitly mention First Brands Group, but the companies share a corporate address in Cleveland and are represented by the same legal counsel, Weil Gotshal.
- Octus reported that the group of lenders reviewing First Brands Group’s capital needs expanded and were expected to bring a “nine-digit increase” in group holdings.
- First Brands’ loans were quoted as being in the high 30s.
September 26 | Analysis of potential non-pro-rata DIP
The Octus team published an analysis of First Brands’ credit agreements, exploring non-pro- rata DIP might be achieved within the bounds of their documents.
September 29 | First Brands Chapter 11 Filing
First Brands filed for Chapter 11 in the Southern District of Texas, to “stabilize its business operations and facilitate a value-maximizing transaction,” according to a press release. According to the petition, the debtors report $1 billion to $10 billion in assets and $10 billion to $50 billion in liabilities.
October 1 | First Day Hearing
Octus reported live from the courtroom for the duration of the hearing, publishing 11 articles on DIP objections, interim approvals, ad hoc holdings and adequate protection.
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