The half a billion USD is clickbait. The number is apparently correct, but the most interesting is the silence in local media.
Last Thursday, a bloomberg article mentioned the bankruptcy of a US autoparts company and UBS lending them half a billion USD.
SRF/RTS/RSI published short articles about the event and forgot about it since then. Evil foreign media (e.g. FT) dropped a bomb today: 30% of the resources of an investment fund under the umbrella of UBS were invested on the bankrupt company. Holy crap! That’s the level of diversification of an idiot like me buying an apartment to rent it. The FT article is available via swissinfo.ch.
The curious thing is that SRF/RTS, serious newspapers and tabloids are mum about it. RSI is far away, so they published a short note. It is almost a joke, but only the fringe ones (inside paradeplatz and finews) are pointing a finger at this.
Maybe I’m crazy, maybe I’m a damned conspiracy idiot, but it seems like news are filtered so that we trust on the competence of some people. Do not make questions, you did not got to the right school, you have never met the right people, you have never worked at the right places, you know nothing about it…focus on your peasant worries and pay your mandatory health insurance on time.
The UBS Hedge Fund Solutions platform and UBS O’Connor funds together emerged as First Brands’ largest unsecured financial creditors, with $349.8 million in supply-chain-finance claims and additional secured exposures that push the total above $500 million.
The really weird part if when factoring is not the old-fashioned factoring of buying invoices to the seller and getting paid by the buyer. Too much work, or the dirty work of collecting cash not worthy the time of investment fund guys. Easier to buy invoices in bulk and get paid by the organization generating the invoices.
FTAV readers might naively assume that if you factor an invoice to be paid by Walmart, you receive the money from Walmart.
However, the eagle-eyed readers may have noticed that one of the prior excerpts from Jefferies’ statement described First Brands as the “servicer” on its factoring facility with Point Bonita. That implies First Brands was handling cash collection on behalf of its customers.
To remove any potential ambiguity, Jefferies went on to say the quiet-part loud in its statement:
For almost six years until September 15, 2025, Point Bonita always had been paid by the Obligors on time and in full. On September 15, 2025, First Brands stopped directing timely transfers of funds from the Obligors on Point Bonita’s behalf.
So, Point Bonita was sending money to First Brands. And First Brands was sending money back to Point Bonita. It seems as if the fund never received a dime from Walmart directly.
Whatever happens next depends on how much investors want to spend on lawyers. It may be forgotten by tomorrow, or it may become a years long history.
As far as I understand the situation, they were buying future invoices in bulk, which obviously did not exist at the time of purchase and probably will never appear.
Everybody involved was getting high commissions on the transactions.
