First Brands bankruptcy link drives Western Alliance lower, says Wells Fargo

Wells Fargo reiterated an Underweight rating and $90 price target on Western Alliance (WAL), saying the First Brands bankruptcy link is driving shares lower, showcasing the lack of margin of error for Western. The company tied to the First Brands bankruptcy through a leveraged facility to Jefferies, as the $715M fund has part of its exposure pledged into a leveraged facility with Western Alliance, which is potentially on the hook if the pledged trade finance assets went bad, the analyst tells investors in a research note. The firm added that Wednesday’s negative headline highlights the primary risk for Western Alliance, namely that it has a much smaller margin of error versus the group.