Oracle's $18 Billion AI Data Center Loan Stalls in Syndication at Roughly 10% Discount

Oracle Corp. (NYSE: ORCL) is struggling to syndicate an $18 billion loan tied to its New Mexico data center, with lead banks Santander and Jefferies quoting the debt at 89-91 cents on the dollar, a discount of nearly 10% from par and an implied yield near single-B credit levels, The Financial Times and The Wall Street Journal reported. The loan, issued in late 2025 against Oracle's $300 billion, five-year cloud contract with OpenAI, has been in distribution for more than six months, forcing banks to retain excess exposure on their balance sheets. Lenders are said to be focused less on the OpenAI contract than on construction timelines at Project Jupiter, where collateral remains hardware and permits until power is connected and revenue begins. S&P cut Oracle to BBB- in July 2026, one notch above junk, while Moody's holds Baa2 with a negative outlook. Oracle carries roughly $129.5 billion in debt, a 4.3x debt-to-EBITDA ratio versus below 1x for Alphabet, Amazon, Microsoft and Meta, and negative free cash flow. Its five-year credit default swap spread has widened to about 203 basis points, near its highest since 2008.