Jefferies has tried to quell concerns about its relationship with the bankrupt automotive parts supplier First Brands Group, issuing an open letter in which top executives said the investment bank could withstand any losses it may incur.

The Wall Street bank has been grappling with its exposure to First Brands -- through its asset management division's Point Bonita Capital -- which the company said totalled about $715mn. Jefferies shares have fallen about 20 per cent so far this month.

"Relative to the scale of Jefferies, we are confident that any losses or expenses from these investments or otherwise in respect of First Brands can readily be absorbed and do not threaten our financial condition or business momentum," Jefferies chief executive Rich Handler and president Brian Friedman wrote in a letter published late on Sunday.

"We believe there has been an impact on our equity market value and credit perception that is meaningfully overdone, and we expect this to correct soon as the facts and range of outcomes are better understood."

Handler and Friedman also denied that the bank earned any undisclosed fees on financing it provided to First Brands through a "side letter".

"First Brands entered into a written agreement with Point Bonita that was solely for the benefit of the investors in Point Bonita, and that, furthermore, was disclosed to all first and second lien lenders to First Brands. There were no undisclosed fees earned by Jefferies," they wrote.

The Financial Times has reported that Jefferies earned fees on financing it provided to First Brands, in an arrangement other lenders say may have violated terms of their own credit agreement with the bankrupt car parts company.

The collapse of First Brands, which has also drawn in the likes of Swiss bank UBS and hedge fund Millennium Management, has prompted the US justice department to open an investigation, the FT reported.

Jefferies says First Brands losses can be absorbed