The Friday Review

What we are reading:

This week's roundup covers a Fed task force studying discount window reform, a $261 million bankruptcy court ruling on the Serta Simmons uptier lending dispute, and the record $35 billion Apollo and Blackstone AI chip financing deal that just started trading. It also includes a turbine supply shortage affecting airlines and data center buildouts, and Starlink's new 10 Gbps speed milestone.

🏛️ One of five task forces Fed Chair Kevin Warsh formed last week is tasked with fixing the discount window, a tool the Fed has relied on since 1913 that banks now avoid even in stress, because using it signals weakness. Shrinking the balance sheet without fixing that stigma just moves the risk somewhere else. https://bpi.com/535-news-the-discount-window-needs-repair/

⚖️ Six years after Serta Simmons primed its own minority lenders in a non-pro-rata uptier, a bankruptcy court ordered the participating lenders to pay $261 million in damages plus 9% prejudgment interest. The judge rejected every equitable defense raised: sophisticated parties, he wrote, accept the litigation risk that comes with sophisticated transactions. https://www.proskauer.com/alert/finally-put-to-bed-bankruptcy-court-awards-serta-simmons-excluded-lenders-261-million

🤖 Apollo and Blackstone's $35 billion financing package for Broadcom and Anthropic's chip buildout is about to begin trading, the largest private credit deal on record. About $15 billion is expected to be drawn by early next year, funding custom chips the AI lab leases rather than owns. https://finance.yahoo.com/technology/ai/articles/apollo-35-billion-ai-chip-130451313.html

✈️ Airlines and hyperscalers are now bidding against each other for the same handful of turbine casting shops. Heavy-duty gas turbines carry three to four year lead times and are essentially sold out through 2028. The bottleneck isn't capital, it's castings. https://www.wsj.com/business/airlines-and-hyperscalers-clamor-for-turbines-only-a-few-companies-make-the-parts-4426ba4d?mod=lead_feature_below_a_pos1

🛰️ Musk confirmed Starlink delivered 10 Gbps symmetric speeds 320 miles above the Arctic Circle, in Utqiagvik, Alaska. The service has grown to 12 million users across 160 countries. https://www.benzinga.com/markets/tech/26/07/60380121/elon-musk-confirms-starlink-can-deliver-reliable-10-gigabit-a-second-upload-and-download-speeds-anywhere-on-earth