MADRID (Reuters) -Spanish bank Santander had debt exposure to bankrupt auto parts maker First Brands Group of at least $55 million by the end of September, a U.S. court document, seen by Reuters, showed.
The collapse of First Brands and subprime lender and dealership Tricolor has unsettled Wall Street’s multitrillion-dollar credit market, which includes leveraged loans, collateralised loan obligations, trade-finance funds and subprime auto loans.
The U.S. court documents, filed in the U.S. bankruptcy court for the southern district of Texas, also showed that the Santander exposure is guaranteed by Bank of America.
Santander declined to comment on Wednesday on the U.S. court document. Bank of America was not immediately available for comment.
The court documents showed that Santander had exposure to First Brands of around $55 million through four transactions by its subsidiaries in Mexico and Brazil – $32.55 million in the Mexican subsidiary and $22.1 million in Santander Brazil.
Santander’s exposure to First Brands was first reported by Spanish newspaper Expansion.
The exposures were tied to entities of First Brands that were not part of the U.S. business and not involved in the Chapter 11 proceedings, a source familiar with matter said.
Separately, the Wall Street Journal has reported that when First Brands filed for bankruptcy in September, it had a $77 million loan from Santander, also tied to a firm not part of bankruptcy proceedings.
Santander declined to comment on the Wall Street Journal report, which Reuters was not able to confirm.
(Reporting by Jesús Aguado; editing by Andres Gonzalez and Jane Merriman)
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