Marathon Feels ‘Good’ About First Brands Debt Bought at 40 Cents

Core Viewpoint - Marathon Asset Management LP perceives First Brands Group as a valuable company despite its poor financial situation, having acquired its term loan at approximately 40 cents on the dollar [1][3]. Group 1: Investment Details - Marathon has taken a leading role in the First Brands steering committee and provided a $1.1 billion debtor-in-possession loan to the company [2]. - The firm holds $238 million in the first-lien term loan and $41 million in the second-lien loan, as indicated in court documents [2]. Group 2: Company Situation - First Brands has emerged as one of the most significant distressed cases this year, entering bankruptcy due to accounting issues raised by loan investors [3]. - A creditor has alleged that up to $2.3 billion has "simply vanished," potentially leading to substantial losses for long-term investors and lenders [3]. Group 3: Strategic Focus - Marathon's objective is to assist First Brands in exiting bankruptcy swiftly and establishing a proper accounting system [4]. - The firm has also invested in Marelli, another global auto-parts supplier that filed for bankruptcy this year [4]. - Marathon is avoiding subprime consumer loans due to increased scrutiny following Tricolor's bankruptcy, citing a "huge" loss rate in that sector [4].