Oracle’s $18 billion data center debt under pressure, FT reports

Sept 18 (Reuters) – About $18 billion in loans tied to an Oracle-leased data center in New Mexico has come under pressure, with loans quoted at 89 to 91 cents on the dollar by syndicate banks, including Santander and Jefferies, the Financial Times reported on Friday.

The 1,400-acre “Project Jupiter” campus in Doña Ana County is part of Oracle’s broader agreement with OpenAI to provide AI computing capacity.

The project secured $18 billion of loans from a consortium of banks late last year to kick-start construction, according to media reports.

Efforts to sell the debt to a broader pool of investors have stalled amid concerns over Oracle’s rising borrowing and weakening creditworthiness, the Financial Times said.

Oracle, Santander and Jefferies did not respond to Reuters requests for comment.

The New Mexico data center campus is part of the Stargate initiative, a $500 billion push to build AI infrastructure across the US, led by OpenAI, SoftBank Group and Oracle.

Oracle’s corporate credit rating sits one notch above junk following a downgrade from S&P in July. Banks were now forced to hold more Oracle-linked project debt on their balance sheets than initially planed, the Financial Times said.

Oracle has been ramping up spending to finance its expansion into AI infrastructure, while its rising debt load has drawn increasing investor scrutiny.

The company forecast up to $95 billion in capital expenditure for fiscal 2027, though it expects repayments from customers for up to $25 billion.

(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Arun Koyyur)