By Faizan Farooque
Publication Date: 2025-11-28 11:47:00
This article first appeared on GuruFocus.
oracle (ORCL, Finance) draws increased control in credit markets as borrowing is tied to its artificial intelligence and the expansion of data centers is accelerating. Analysts at Morgan Stanley said the cost of five-year credit default swaps rose to 1.25 percentage points in November, the highest since 2022, and could rise above 1.5 points next year without further details on the company’s long-term financing strategy.
The shift comes as Oracle raises significant capital to support its AI infrastructure. The company recently issued $18 billion in bonds and was tied to large financing packages for new data center development, including an $18 billion loan in New Mexico and a $38 billion loan for sites in Texas and Wisconsin. Morgan Stanley said the rapid increase in borrowing has prompted more investors to hedge their exposure, driving up CDS prices.
Attention now turns to Oracle’s second-quarter fiscal 2026 results on December 15.