Jefferies Financial Group Inc. (NYSE: JEF) released a letter from its CEO and president responding to Western Alliance Bank's lawsuit and public statements regarding loans tied to First Brands receivables.

According to the letter, Western Alliance made non-recourse loans over four years to special purpose entities LAM Trade Finance Group LLC and LAM TFG I SPV LLC, which held only First Brands receivables. The loans carried no guarantee or credit support from Jefferies or its affiliates.

The borrowing entities were owned by the Point Bonita master fund, with assets consisting solely of First Brands receivables and related proceeds. The loan agreement limited Western Alliance's recourse to the assets of LAM TFG I SPV LLC, with no guarantee from Jefferies or the Point Bonita fund.

Before First Brands filed for bankruptcy in September 2025, Western Alliance requested guarantees from both the Point Bonita master fund and Jefferies for the loan to LAM TFG I SPV LLC. Both requests were denied, but Western Alliance proceeded with a forbearance arrangement.

Jefferies stated that Western Alliance CEO Ken Vecchione made "false and misleading statements" on March 6, including claims about Jefferies being unable to make payments. The company emphasized it honors all obligations but has no obligation regarding Western Alliance's non-recourse loan to the special purpose vehicle.

The letter also addressed Jefferies' exposure to Market Financial Solutions (MFS). A European subsidiary loaned MFS £103 million under a warehouse facility secured by bridge loans to residential borrowers and property investors. Jefferies estimates the net impact on earnings from the MFS facility will likely be less than $20 million.

Jefferies has recovered approximately 25% of the MFS facility in cash and believes another 40% is secured by valid loans. The company described the facility as within its risk appetite and the potential loss as manageable.