☕ Banking credit

Good morning.

The banks may have stepped back from direct lending to riskier sectors, but they're still very much in the private credit game, just with a clever twist.

As Capital Brief’s Andrew Cornell explains, rather than diving headfirst into commercial property or SMEs, they're funding private credit funds that do the heavy lifting — an arbitrage that lets banks dodge hefty capital charges and still profit from the booming $220 billion sector.

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Market movers

Gaming giant Tabcorp might be supportive of Australia’s proposed crackdown on gambling ads, but are investors?

Tabcorp shares were among the worst performers on Wednesday, falling 2.54% as analysts reckoned the proposed crackdown could cut new punter sign-ups in half and leave racing reeling with a $6.4b hole. (AFR)

The quick sync

• The customer service software industry is both large and uniquely ripe for AI disruption. Australian startups like Brainfish are in a $90b race to supercharge customer service with AI. (Capital Brief)

• Australia's government secrecy is 'definitely significant', says The New York Times' longtime national security correspondent, David E. Sanger. (Capital Brief)

• The Albanese government will fund a 15%, $3.6b, pay rise for childcare workers over 2 years on the proviso their employers agree to limit fee increases until after the election. (AFR)

• The CFMEU assigned a senior Bandidos bikie enforcer to work as a union organiser on major Victorian government construction projects and to sit on the governing board of the John Setka-led branch. (AFR)

• Australia is set to become the 4th global market to introduce a matching system across banks that confirms payee details before payment, in an attempt to clamp down on scams and reduce errors. (The Australian)

Trading floor

M&A

• SP Setia is set to sell 50% of Melbourne's Shangri-La Hotel to an unlisted credit fund for over $500m, with final agreements expected soon. (AFR)

• Ramelius Resources’ CEO Mark Zeptner said acquiring an 8.9% stake in Spartan Resources gave his company a strategic position and it will continue evaluating Spartan. (The Australian)

• Regional Express (Rex) is being marketed for sale by administrators, emphasizing its status as Australia's largest regional airline and its valuable route network and slot access at major airports. (AFR)

• Booktopia, the collapsed ASX-listed retailer, is set to be acquired by DigiDirect. (AFR)

• Swiss giant Unilabs and other trade players are preparing for a potential $4bn acquisition of I-MED Radiology Network from its British private equity owners, Permira. (AFR)

• Red 5 is tidying up its register post-merger with Silver Lake Resources by selling a $138m stake via Euroz Hartleys at 34¢ per share. (AFR)

• Patrick Farrugia accuses Star Entertainment and Barrenjoey of leaking information to sabotage his bid for part of the company. (Capital Brief)

• Macquarie Capital is finding it challenging to sell Melbourne’s SkyBus operator, Kinetic Group, at a valuation of 10 times earnings. (AFR)

• Boss Energy CEO Duncan Craib defended selling over half his shares in May, despite a 10% share price drop. (The Australian)

Capital Markets

• Neuren Pharmaceuticals halted ASX trading pending results from its Phase 2 trial for Angelman syndrome drug NNZ-2581. (Capital Brief)

• Rubicon Water is raising $18m to capitalize on growing US opportunities, with strong backing from its board and key management. (BNA)

VC

• None

People moves

• None

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The watercooler