According to informed sources, UBS Group AG may write down over 10% of a credit fund managed by its hedge fund unit O'Connor following the bankruptcy of U.S. auto parts supplier First Brands.

Earlier this month, UBS Group AG announced plans to liquidate investment funds managed by O'Connor, with most assets expected to be realized by year-end.

The bank stated, "As a priority, we are taking steps to protect client interests and maximize recovery of remaining positions tied to First Brands Group through complex bankruptcy proceedings."

In September, court filings revealed that auto parts supplier First Brands Group Holdings had filed for Chapter 11 protection in Texas, with liabilities estimated between $10 billion and $50 billion. The privately held company, whose brands include Anco and Trico wiper blades plus Fram filters, reported assets in the $1 billion to $10 billion range in its September 28 court submission.