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Wall Street is on edge after auto parts maker First Brands filed for bankruptcy on 29 September, revealing liabilities of $10bn-$50bn against $1bn-$10bn in assets and heavy reliance on opaque off-balance-sheet invoice financing. Arranger Raistone says up to $2.3bn has "vanished," while Jefferies reports $715m in exposure and an inquiry probes potential double-pledged invoices. The collapse, alongside auto lender Tricolor’s failure, is fueling fears about hidden risks in fast-growing private debt markets, where sparse disclosure could magnify losses and spark wider contagion, experts warn.

Prepared by Christopher Adams and reviewed by editorial team.