Rewrites headline and paragraph 1 with comments from Morgan Stanley, adds context on First Brands and Tricolor throughout

By Saeed Azhar, Tatiana Bautzer and Manya Saini

Oct 15 (Reuters) - Bank of America's BAC.N syndicated loans to First Brands are secured by strong collateral, while Morgan Stanley MS.N has no exposure to the bankrupt U.S. auto parts supplier, the banks' top executives said on Wednesday.

The collapse of First Brands, within days of subprime lender and dealership Tricolor's fall, has unsettled some participants in Wall Street's multitrillion-dollar credit market, spanning leveraged loans, collateralized loan obligations (CLOs), trade-finance funds, and subprime auto loans.

Both First Brands and Tricolor filed for bankruptcy protection last month.

The turmoil following the announcements has raised questions about the exposure of several Wall Street fund managers that pool investor capital to lend to companies.

"We're in the syndicated loan for the First Brands deal," BofA Chief Financial Officer Alastair Borthwick told reporters on a call. "That is an asset-backed loan. So when we think about prudent risk management, we're thinking about the borrower, we're thinking about the collateral, and here, we're secured."

Bank of America said it does not have exposure to Tricolor.

Meanwhile, Morgan Stanley Chief Financial Officer Sharon Yeshaya told Reuters in an interview that the bank has no exposure to recent bankruptcies and does not focus on consumer credit.

"We're not seeing signs of cracks in the credit market, and that largely has to do with the fact that we believe that balance sheets are strong," she said, adding that there are always idiosyncratic risks in credit.

As the third-quarter earnings season kicked off this week, several top Wall Street executives, from BlackRock CFO Martin Small to JPMorgan Chase CEO Jamie Dimon, addressed the issue.

JPMorgan Chase also said that it has re-examined its controls after finding itself exposed.

Meanwhile, Wells Fargo and BlackRock said credit investing activity has been strong, despite investor fears of a wider ripple effect slowing the booming global business of corporate credit.

"The reported cases look more like idiosyncratic pockets of stress ... they don't look like broad stresses on asset-based finance or consumer credit," said BlackRock CFO Small.

Still, concerns persist that a credit market downturn could trigger further stress.

"When you see one cockroach, there are probably more, and so everyone should be forewarned of this one," Dimon said on a post-earnings analyst call on Tuesday.

JPMorgan wrote off $170 million in the third quarter related to the Tricolor bankruptcy.

Earlier in October, Jefferies JEF.N disclosed that a fund in its asset management division, Leucadia Asset Management, has about $715 million of receivables tied to First Brands. The investment bank has since said that any losses will be readily absorbable.

UBS UBSG.S is examining the impact of the bankruptcy of First Brands on several of its investment funds, with the Swiss bank exposed to the tune of more than $500 million.

(Reporting by Saeed Azhar and Tatiana Bautzer in New York and Manya Saini and Pritam Biswas in Bengaluru; Editing by Shinjini Ganguli)

((Manya.Saini@thomsonreuters.com; X: manya__saini;))