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Investing.com -- Morgan Stanley’s asset management division has requested to redeem some of its investment from a Jefferies Financial Group Inc. fund heavily exposed to bankrupt auto parts supplier First Brands Group, according to a Bloomberg report late Friday.
The asset manager has been negotiating to withdraw a portion of its investment from Point Bonita Capital, a unit of Jefferies’ Leucadia Asset Management. Point Bonita had approximately 25% of its $3 billion trade-finance portfolio invested in First Brands-related receivables.
BlackRock Inc. and Texas Treasury Safekeeping Trust Co. have also submitted redemption requests, as previously reported.
These partial-redemption requests were made in recent weeks as the auto parts supplier’s financial condition deteriorated. First Brands filed for bankruptcy on Sept. 28.
On Wednesday, Jefferies disclosed that Point Bonita had $715 million invested in receivables owed to First Brands. The unit has held accounts receivables tied to First Brands since 2019. While the fund is theoretically exposed to the credit risk of First Brands’ customers - including Walmart Inc. and AutoZone Inc. - First Brands was responsible for directing payments to Point Bonita.