ZURICH, Oct 8 (Reuters) - UBS said on Wednesday

it was examining the impact of the bankruptcy of First Brands on

several of its investment funds, with the Swiss bank exposed to

the tune of more than $500 million to the collapsed U.S. auto

parts supplier.

Switzerland's biggest lender has exposure to First Brands

debt and through supply chain finance agreements, spread across

funds including at least one managed by its O'Connor hedge fund

unit, according to court filings in the United States.

First Brands filed for bankruptcy protection last week after

its lenders began investigating irregularities in the company's

financial reporting. The company has $11.6 billion in total

liabilities, according to the court documents.

Its collapse has unnerved debt investors and stoked fears of

broader stress in corporate debt markets, and especially about

growing risks in private credit where lending activity has

soared in recent years.

U.S. bank Jefferies disclosed on Wednesday that it had a

$715 million exposure to First Brands through a fund.

"This event affects many private credit and working capital

providers across the industry," UBS said in a statement.

"In this highly fluid situation, we are working to determine

the potential performance impact on the small number of our

affected funds and are focused on protecting the interests of

our clients."

While the economic fallout would be small for a bank of

UBS's size, one analyst, asking not to be named, said the

exposure was "not ideal for UBS's image and political

perception" at a time when the lender was trying to persuade

Swiss politicians to soften capital rules designed to make Swiss

banking safer.