—— Hyundai and Kia Recall 3.3 Million Vehicles; OpenAI Plans Share Sale; Meta Unveils Personalized AI Assistant; Wells Fargo Launches Private Credit Fund; Wells Fargo Buys Former Neiman Marcus Space; US Mortgage Payments Jump 46%; New York’s Largest Mall Gets Bond Downgrade
1. Hyundai and Kia Recall 3.3 Million Vehicles
The U.S. National Highway Traffic Safety Administration (NHTSA) issued a statement saying Hyundai and Kia will recall 3.3 million vehicles due to fire risk caused by potential brake fluid leaks that may lead to electrical shorts. Both companies recommend parking the vehicles outdoors until repairs are completed.
NHTSA said Hyundai has found a fix and will replace the affected vehicles’ ABS (anti-lock braking system) modules, while Kia is still working on a solution.
As of now, neither Hyundai nor Kia has received any reports of accidents or injuries related to the issue.
Vehicle owners can check the recall information on the NHTSA website.
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2. OpenAI Plans Share Sale
The Wall Street Journal reports that OpenAI, the creator of ChatGPT, is in talks with investors over a potential share sale that could value the company at $80 to $90 billion — three times higher than earlier this year.
The shares being sold are existing employee holdings, not newly issued shares for fundraising.
Microsoft has already invested $13 billion in OpenAI, and the company’s annual revenue could exceed $1 billion.
OpenAI is on track to become one of the world’s most valuable startups.
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3. Meta Unveils Personalized AI Assistant
At its Connect developer conference today, Meta announced that it will launch AI assistants on Instagram, Facebook, and WhatsApp, with capabilities like answering questions and generating images.
Reportedly, 28 celebrities have contributed their voices and personalities to chatbot personas that users can interact with.
The AI assistant beta launches today, and more themed features — including gaming, philosophy, and fashion — will roll out in the coming weeks.
CEO Mark Zuckerberg said the AI assistant is not just for answering questions but for helping users connect with others and complete tasks.
Meta’s AI assistant is developed in collaboration with Microsoft’s Bing.
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4. Wells Fargo Launches Private Credit Fund
To tap into the fast-growing private credit sector, Wells Fargo and asset manager Centerbridge have jointly launched a $5 billion private credit fund, focused on lending to mid-sized U.S. companies.
Wells Fargo, the fourth-largest U.S. bank by assets, said it will co-invest alongside Centerbridge. Other investors include Abu Dhabi Investment Authority and British Columbia Investment Management, a Canadian pension fund.
The fund aims to raise $2.5 billion in equity, of which $2 billion has already been committed by the above-mentioned sovereign and pension funds.
The private credit industry is currently led by alternative asset giants like Apollo, Ares, and Blackstone.
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5. Wells Fargo Buys Former Neiman Marcus Space
Sources revealed that Wells Fargo & Co. will purchase the former Neiman Marcus space in Manhattan’s Hudson Yards for $550 million, and plans to convert it into office space.
The deal involves 400,000 square feet spanning the fifth to seventh floors of the 20 Hudson Yards building, which Wells Fargo plans to occupy.
The current property owners are developers Related Cos. and Oxford Properties, who will retain the remaining space in the 11-story building.
This transaction is poised to become one of Manhattan’s largest commercial real estate deals of the year.
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6. US Mortgage Payments Jump 46%
According to the Consumer Financial Protection Bureau (CFPB), in 2022 the average monthly payment for new 30-year U.S. mortgages surged 46%, rising from $1,400 to $2,045.
CFPB Director Rohit Chopra stated in a release that this trend is likely to persist through 2023. As the Federal Reserve continues to raise interest rates, both home purchases and new mortgage issuances are declining.
In addition to higher monthly payments, mortgage-related closing costs also rose 22% to a median of $5,954.
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7. New York’s Largest Mall Gets Bond Downgrade
Moody’s Investors Service today downgraded the municipal bonds tied to Destiny USA, the largest mall in New York State.
Moody’s explained that the mall may not meet the net operating income (NOI) thresholds required to qualify for a loan extension.
Previously, Carousel Center mall issued the bonds and used the funds for building expansions that eventually grew into today’s massive Destiny USA complex.
Moody’s noted that the mall met its first NOI target of $16 million and qualified to extend the loan through June 6, 2024. However, the next NOI target is 18.75% higher, making it much harder to achieve.
According to Bloomberg, the total bond amount may be as high as $270 million.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.