First Brands Group, a U.S.-based supplier behind brands like Raybestos, Carter, and Trico, is facing a deepening financial crisis that could have ripple effects across the Canadian aftermarket.

While tariffs have challenged many auto parts supply chains, none of the current media reports link First Brands’ crisis directly to trade policy. Instead, the problems appear rooted in over-leveraging, financial engineering, and liquidity shortfalls, rather than cross-border tariffs.

The Financial Times reported that First Brands carries about $6 billion USD in debt, including nearly $4.9 billion in first-lien loans, but total leverage may be closer to $10 billion USD when off-balance-sheet financing such as factoring is included.

These financing arrangements have raised red flags among creditors, prompting Jefferies to pause a major refinancing in August pending a “quality of earnings” review as reported by financial intelligence platform Octus.

Liquidity concerns intensified in early September when a creditor bank reportedly seized funds as an interbank transfer landed funds in account at the creditor bank This significantly cut into the company’s reported $800 million USD cash reserve in early September as reported by the Financial Times.

In response, First Brands is seeking up to $1.5 billion in debtor-in-possession financing to keep operations running through a possible Chapter 11 restructuring.

(As of this writing, the morning of Friday, September 26, First Brands had not filed for Chapter 11, nor had it released any public statements.)

The financial market’s response has been severe. Senior loans now trade at around 45 cents on the dollar, while junior bonds have collapsed to as low as 16 cents. Reuters noted that Fitch Ratings downgraded First Brands to CCC in September, citing “heightened restructuring risk.”

For Canadian jobbers and distributors, this instability raises real concerns.

First Brands supplies critical replacement components into Canada; any disruption in logistics, renegotiation of contracts, or supplier claims in bankruptcy proceedings could impact availability and pricing north of the border.

With Canadian distributors already managing tighter margins, a supply shock could add pressure at the wholesale level.

For the Canadian aftermarket, watching the outcome will be critical to planning supply continuity into 2026.