Apollo, Diameter Closed Shorts on Auto-Parts Firm First Brands

Investment firms Apollo Global Management Inc. and Diameter Capital Partners have both closed their bets against the debt of troubled auto parts supplier First Brands Group, according to people familiar with the matter.

The company’s loans have recently tumbled amid concerns about off-balance sheet financing tied to its receivables, according to people with knowledge of the matter who asked not to be identified discussing private matters.

Apollo and Diameter declined to comment. First Brands did not immediately respond to a request for comment.

First Brands is working with advisers as it assesses its options for dealing with its $6 ...