Oracle's $18 Billion Data Center Debt Falls Into Distressed Territory
nashnova research
Roughly $18 billion in loans tied to Oracle's New Mexico data-center project fell to 89–91 cents on the dollar last Friday. This means → the market is casting a real-money vote of no confidence in the most aggressive AI-infrastructure buildout among Big Tech.
Why can't the banks offload $18 billion in loans?
The "Project Jupiter" loans, underwritten by Santander and Jefferies, are now quoted privately at 89–91 cents — well below the near-par range where healthy debt trades.
This means → the banks planned to syndicate the debt to a wider investor base, but buyers balked — banks are stuck holding more Oracle-linked debt than intended.
In plain terms = the banks packaged the loans to sell on; nobody wanted them, so the banks are left carrying the bag.
What is wrong with Oracle's own credit?
The project debt carries a private investment-grade rating, but Oracle at the corporate level sits just one notch above junk — S&P downgraded it in July.
Co-founder Larry Ellison, 82, abruptly cancelled a $7.5 billion stock-sale plan last week with no explanation.
Since Oracle announced its $300 billion compute contract with OpenAI a year ago, the stock has fallen 50%.
This reflects a broader market worry: not just one project, but whether Oracle's overall debt load and expansion pace are sustainable.
Why is New Mexico pushing back?
The project initially planned to run on 2.2 GW of gas turbines, but the state land office rejected the natural-gas pipeline application.
In April Oracle switched to Bloom fuel cells — a lower-emission power source — but the pipeline application to feed them was also denied.
In August an air-permit application was frozen after two environmental groups sued; a judge ruled last Thursday that the review process may resume — but resistance is far from over.
In plain terms = no matter how Oracle reshuffles its power plan, local concerns over water and air quality remain unresolved, and the project is stuck at the energy-permitting gate.
What does the political climate mean for the project?
Deb Haaland, the Democratic gubernatorial candidate and former U.S. Interior Secretary, has pledged to freeze all new data-center projects if elected and to require developers to invest in renewables.
An *Albuquerque Journal* poll shows 65% of New Mexico residents oppose large data-center construction; only 20% support it.
State records show Oracle donated over $12,000 to Haaland's campaign in late August.
This means → regardless of the election outcome, data centers have become a political issue locally — Oracle faces not just regulatory hurdles but a shift in public sentiment.
How bad is the construction delay, and what do the three pressures add up to?
According to market-intelligence firm SynMax, Phase 1 is now at least seven months behind its original schedule, which targeted completion this November.
Debt trading at a discount + regulatory gridlock + construction delays — all three pressures are landing on the same project, and that project is the centerpiece of Oracle's $300 billion contract with OpenAI.
This means → whether Oracle can deliver on its AI-infrastructure commitments on schedule is no longer a distant risk — it is the reality the market is already pricing in.
市场有风险，内容仅供研究参考，不构成投资建议。