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Good Morning,

Fitch may downgrade dozens of banks, Hindenburg has a new short target, US retail sales topped forecasts, Bain acquired Fogo de Chão, US Steel takeover talks have manufacturers concerned, hedge funds beefed up their AI bets, and Home Depot’s inflation pressures eased.

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Let’s dive in.

Before The Bell

Markets

• US stocks dropped after Fitch warned that it may have to downgrade credit ratings of dozens of US banks, including JPMorgan

• Oil prices fell 1.7% due to sluggish Chinese economic data

• Asian stocks closed mixed with Japan’s Nikkei climbing 0.56% after Japan’s GDP grew 1.5% QoQ, while Hong Kong’s HSI fell 1% due to sluggish Chinese July industrial output and retail sales data

Earnings

• Home Depot beat Q2 earnings and revenue expectations but posted a 2% YoY sales decline and maintained a muted full-year sales forecast due to continued consumer caution (CNBC)

• Sea Limited stock fell ~30% after reporting mixed Q2 results, missing on revenue with 5.2% YoY revenue growth but beating analyst profit expectations (RT)

• CAVA Group stock surged 10% after reporting its first profitable quarter and beating revenue expectations with 62% YoY growth thanks to new restaurant openings (CNBC)

• What we're watching this week:

  • Today: Cisco Systems, TJX, JD.com, Progressive, Target

  • Thursday: Walmart, Applied Materials, Ross Stores, Dole, Keysight Technologies

  • Friday: Deere & Company, Palo Alto Networks, Estee Lauder, XPeng

• Full calendar here

Headline Roundup

• Fitch warns it may be forced to downgrade dozens of banks, including JPMorgan Chase (CNBC)

• US retail sales top forecasts, showcasing consumer resilience (BBG)

• US Steel takeover talk rattles manufacturers (WSJ)

• European gas spikes on market jitters over LNG strike risk (BBG)

• Amazon pharmacy automates discounts to help insulin patients get pledged prices (RT)

• Hedge fund beefed up AI bets in the second quarter (CNBC)

• Short seller Hindenburg takes aim at Freedom Holding Corp. stock (WSJ)

• Amazon’s leader on Alexa, Echo, and other devices plans to leave (WSJ)

• Suspected spies for Russia arrested in UK; Russia’s central bank hikes rates to 12% (CNBC)

• SEC lawyers subpoena fund managers over ESG disclosures (FT)

• Home Depot’s inflation pressures ease (WSJ)

• Argentina bans beef exports for 15 days after peso devaluation (BBG)

• Regional banks slide after Fed’s Kashari advocated ‘significantly further’ capital regulation (CNBC)

• Wall Street is ready to scoop up commercial real estate on the cheap (WSJ)

• Disney accused of withholding hundreds of millions of dollars from ‘Avatar’ sequel financier (CNBC)

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Deal Flow

M&A / Investments

• Occidental Petroleum will pay $1.1B to acquire Carbon Engineering to help the US oil and gas producer build 100 carbon capture plants (RT)

• Bain Capital will buy Brazilian steakhouse chain Fogo de Chão from PE firm Rhone Capital in a $1.1B deal, including debt (RT)

• Silver Lake is preparing to explore a sale of tax-free shopping company Global Blue, which has a market cap of $1B, after the PE firm received expressions of potential interest (RT)

• French producer Maurel & Prom will buy Gabon oil and gas company Assala Energy from Carlyle Group for $730M (RT)

• Australia’s Azure Minerals rejected a $585M buyout offer from Chilean chemicals company and lithium producer SQM (RT)

• An affiliate of Citadel acquired ~$485M of bankrupt trucker Yellow’s debt previously owned by Apollo Global Management and other senior lenders (BBG)

• ElectraMeccanica, a $100M market cap maker of three-wheeled Solo EVs, will merge with UK-based truck manufacturer Tevva to expand in the electric truck market (TC)

• PE firm TPG approached Ernst & Young about potentially buying a stake in its consulting arm (FT)

• Czech billionaire Daniel Kretinsky is in advanced talks to team up with Germany’s RAG-Stiftung foundation to make an offer for Germany’s fifth largest utility, Steag (BBG)

• Fruit of the Loom dealer and intimates-maker Ariela & Associates International acquired Gen Z underwear brand Parade (BBG)

• Qatari seaport operator QTerminals will acquire Kramer Group's majority stake in the Netherlands' port of Rotterdam (RT)

VC

• Dublin-based global critical minerals investment company TechMet raised a $200M equity round led by DFC and Mercuria Energy (FN)

• Digital wallet-based purchasing and reimbursement platform ClassWallet raised $95M in funding led by Guidepost Growth Equity (BW)

• Ceibo, a Chilean copper extraction technology startup, raised a $30M Series B led by Energy Impact Partners (BW)

• Voiceflow, a platform for building conversational AI experiences, raised a $15M round at a $105M valuation led by OpenView (TC)

• Zeelo, a ‘smart bus’ startup providing bus operators / employers / and schools private bus / shuttle transport programs, raised a $14M Series A extension led by FlatzHoffmann (TC)

• Hydrogen electrolyzer startup Advanced Ionics raised a $12.5M Series A led by bp ventures (BW)

• Phospholutions, a startup developing sustainable fertilizer tech, raised $10.2M in funding led by Advantage Capital (BW)

• Grit, a startup using ML and static analysis to eliminate technical debt, raised a $7M round led by Founders Fund and Abstract Ventures (FN)

• Tausight, a healthcare AI-powered data security company, raised $6M in financing led by Polaris Capital (FN)

• Insurtech startup SureIn raised a $4.4M seed round led by Pact VC (FN)

• Altos Radar, an automotive radar startup, raised a $3.5M round led by Hesai Technology (FN)

IPO / Direct Listings / Issuances / Block Trades

• IndiGo co-founder Rakesh Gangwal’s family will sell $450M worth of shares in operator Interglobe Aviation in a block trade (RT)

• Rob McEwen is eyeing financing options for his Argentinian copper project McEwen Copper, which could IPO as soon as September at a $100M-$150M valuation (BBG)

• AI-powered email security startup Abnormal Security reached $100M in ARR and is eyeing an eventual IPO (RT)

SPAC

• Vietnamese EV maker VinFast Auto soared on its market debut to a $65B de-SPAC valuation (BBG)

• LatAm Logistic Properties, a leading Central and South American industrial real estate developer and owner, will go merge with Two in a $578M deal (RT)

• Industrial renewable energy company One Energy Enterprises will go public in a $300M merger with TortoiseEcofin Acquisition Corp. III (BBG)

Debt

• Private credit firms including Blue Owl Capital and Oak Hill Advisors will provide a $4.8B fully funded direct loan as a part of Vista Equity Partners’ refinancing of fintech firm Finastra Group Holdings’ debt (BBG)

• PNC Financial Group Services raised $750M through a sale floating rate notes due in 2034 (BBG)

Bankruptcy / Restructuring

• Zhongzhi Enterprises Group, a top Chinese $138B AUM financial conglomerate, missed payments on multiple high-yield investment products, putting it at risk of failure (BBG & BBG)

• Wheels Up Experience will receive a $500M financing package from Delta Air Lines and tourism turnaround investors, allowing the private jet membership company to avoid bankruptcy (WSJ)

• Israeli AI insurance startup Vesttoo filed for bankruptcy after being accused of a multibillion-dollar fraud scheme with faked letters of credit; it is under investigation from the FBI and other regulators (WSJ)

• Crypto custodian Prime Trust filed for bankruptcy protection after reporting a shortfall of customer funds (WSJ)

Fundraising

• Guggenheim Investments, the asset-management arm of Guggenheim Partners, is seeking to raise at least $1.5B for its new private credit fund (BBG)

• Growtheum Capital Partners, a Singapore PE firm founded by former GIC managers, raised $567M to invest in India and Southeast Asia (BBG)

• PE firm Angeles Equity Partners raised over $540M for its Angeles Equity Partners II fund to invest in industrial companies (WSJ)

Crypto Corner

• Crypto exchange Binance filed for a protective court order against the SEC (RT)

• Bankrupt crypto lender Celsius Network won court approval to poll users on its proposal to restart as a user-owned company and redistribute ~$2B worth of Ethereum and Bitcoin (BBG)

• Binance plans to shut down its buy-and-sell service Binance Connect to focus on its main product (CD)

Exec’s Picks

• Join Tegus' VP of Machine Learning, Michelangelo D’Agostino on Aug 30 to unpack VC and PE investor’s top questions around next generation AI. Secure your spot now.

• Mark your calendars: this Saturday, August 19th, Litquidity is hosting the inaugural Lit Cup at Bond East Hampton! Join us for a full day of tennis, padel, music, food, and drinks by clicking here.

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