Inside First Brands’ Chapter 11: Dissecting the Snapshot and Waterfall Model
Peter Sakon - Senior Analyst, CreditSights, Will Lee - Analyst, CreditSights, Todd Duvick - Head of Autos, CreditSights
5 October 2025
Insights into First Brands’ Chapter 11 restructuring and waterfall analysis, including:
Valuation Overview: Explore a realistic $3 billion value estimate for First Brands, reflecting doubts about the company’s reported financials.
DIP Loan Opportunity: Find out why the new debtor-in-possession (DIP) financing looks attractive, with short-term upside potential and priority repayment status.
Recovery Risks: Learn how high costs, heavy cash burn, and complex funding needs could limit recoveries for other lenders.
Cash Flow Pressures: Discover insights into First Brands’ large near-term cash needs and the likelihood of requiring additional financing in 2026.
Recovery Scenarios: Get a breakdown of potential creditor recoveries based on different sale outcomes and financial assumptions.
Key Uncertainties Ahead: Find out what remains unclear, including data reliability, sale plans, 2026 funding, and overall restructuring
Given significant market interest, we reviewed the first-day filings, Cleansing docs, developments over the past few weeks, and pulled together some initial thoughts for our clients. We also assume familiarity with this credit, case and all the relevant filings.
In this report, we summarize the DIP economics, some key issues, discuss valuation and incorporate it into our preliminary Waterfall analysis.
Valuation: Given ~$5.6 bn of Company reported revenue, we are skeptical of the $1.133 bn in Company reported EBITDA. Using $5 bn in revenue (~11% haircut), an arbitrary 12% EBITDA margin, this equals $600 mn in EBITDA. It’s unclear what an acquirer will pay, but a 5x multiple for a primarily aftermarket-focused automotive supplier seems reasonably conservative. Taken together, we believe that $3 bn Enterprise Value may be adequately conservative at this time for a ‘Downside estimate’.
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