Jefferies got an unannounced fee for financing the first letter “First Brands”

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Jefferies has received unannounced fees for the funding it provided to the first group of the first lenders.

The existence of the previously not reported “side message” between Jeffrez and First brands It threatens to become a flash point for other lenders where they are trying to get control of the public budget of the bankrupt.

The collapse of the auto parts maker in the United States-which raised billions of dollars in the debts of unmarked papers-was wrapped badly-before the US Trade War, Donald Trump, with an additional tariff for additional financial pressure on the company as its basic work was deteriorating. Pushing the fall of the first brands from lenders and investigation to Financial affairs as part of its bankruptcy.

The American Investment Bank is subject to scrutiny for it A long -term relationship With the first brands, after placing billions of debt with fund managers who believe they do not have a complete picture of the group’s financial situation.

The latest of these deals – an attempt to re -financing $ 6 billion of first brand debts – takes place in August where questions have grown about the financial statement of the first brand. The deposits have since demonstrated the light -based spaena maker, and the brake components have missed interest payments on more than a billion dollars of the debts of the papers outside the balance months ago.

Separate from its banking relationship, the Jefferies Investment Unit has also provided more unusual financing for the first brands associated with customer bills. This lending was not widely known in Wall Street until a Financial Times report last month.

The first borrowing facility was presented with Jefferies through the bank’s asset management department, through a box known as the Point Bonita Capital. The first brands will sell their customer bills to Point Bonita, which allowed them to assemble cash before customers such as Car Parts Autozone or Walmart are paid for the parts they received.

Besides the Point Bonita lending facility, the Jefferies unit also implemented an additional drawing letter called the first brands.

The auto parts company has been restricted to its agreement with other lenders of borrowing at high interest rates when the “Al -Awla” facilities were used, a form of external financing.

The interest rate on these loans was distributed at 5 percentage points on the standard interest rate standard.

The side of the first brands allowed the sale of its bills at interest rates above this level. The interest on these bills has been closed in the spread of the five percentage, but the first brands will pay several percentage points more than the fees, depending on the bills they were selling.

The first brands received the so -called unlimited opinion from the lawyers at a time when the drawing letter was agreed, which is a legal opinion on reassuring the company that the arrangement did not violate the conditions in the loan agreement, according to a person who was informed about the matter.

Jefferies and First Brands refused to comment.

Side messages are often used in financing to provide some lenders additional conditions and notes that have not been disclosed in their main financing agreement.

The creditors were confused about the Ponita drawing letter when telling it of its existence.

The lenders referred to the era that dictates this type of funding “that will not exceed” 5 percent on a floating standard, according to the people who saw the conditions.

The covenant dictates only the costs about interest and did not mention the fees specifically. One of the lenders added that this may provide the first trademarks the legal cover to pay those higher costs without violating its loan agreement.

These covenants are critical defense measures for lenders, a warning sign that the company’s financial health is deteriorating or the burden of its debt is swelling. The violation of the covenant aims to force borrowers to the negotiating table to find a solution, or provide creditors with treatments. For the first brands, the violation would also prevent it from exploiting the bottom lenders to obtain additional money.

I told many of the first brand lenders that FT never saw the side message concerned. Others said they believed that the additional fees either violate the covenants that protect the lenders, or “not in a spirit” how the covenant was organized.

Jefferies may have great pressure on the Bonita Point box due to the first brands.

Pinta – which was named after a beacon overlooking the Gulf of San Francisco – was safe and safe for investors, according to the marketing materials reviewed by FT.

“Like the same name, Point Bonita Capital seeks to serve as a fixed beacon in a dynamic environment,” said one of the investors.

But the box is now listed as a creditor that is not guaranteed to bankruptcy of the first brands.

The people said that Ross Berger, Pinta Capital’s president, was a major engineer, and the unit had more than $ 500 million in first brand bills.

The stadium documents in the fund stipulates: “Berger and his team have many contracts of joint experience in the complex portfolio management in all economic courses and the suspension of the market.”

Berger refused to comment through a spokesman for Jeffrez.