Oracle's data-centre lenders are stuck with $18 billion they cannot sell.
Reuters reported on 18 September, citing the Financial Times, that about $18 billion of loans tied to a data centre leased to Oracle in New Mexico has come under pressure.
Banks including Santander and Jefferies quoted the debt at 89 to 91 cents on the dollar.
The site is Project Jupiter, a 1,400-acre campus in Dona Ana County, built under Oracle's agreement to supply computing capacity to OpenAI. The initial plan called for 2.2 gigawatts of gas turbines.
The FT reported growing local opposition over water supply and air quality. Efforts to sell the debt to broader investors have stalled amid concerns about Oracle's rising borrowing and weakening creditworthiness. Reuters said Oracle, Santander and Jefferies did not respond to requests for comment.
A quote of 89 to 91 cents means investors want a discount to hold the loan. The report does not say whether they are pricing credit or construction risk, local opposition, or the difficulty of selling the paper on.
For buyers, the contract point is simple. Delivery can sit with a project company rather than the vendor whose name is on the contract.
If committed capacity is not built on schedule, what does your contract actually give you?
Sources
Our file on Oracle
- 17 Sept
Oracle shipped 673 patches. Six maximum-severity flaws needed no login.
- 12 Sept
Oracle raised its layoff budget by $700 million to $2.8 billion.
- 10 Sept
An Oracle flaw let attackers take Social Security numbers. Bimbo Bakeries confirmed it.
- 9 Sept
Brussels settled with SAP. It is now asking about Oracle.
- 8 Sept
£19m budgeted. £216.5m lost.
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