By Nick Farrell
Publication Date: 2025-12-01 09:09:00
Credit traders see a chaotic year ahead
Bloomberg reported that Oracle’s debt flashed warning lights in November as its risk indicator climbed to a three-year high, prompting traders to murmur that something unpleasant was brewing.
Morgan Stanley credit analysts Lindsay Tyler and David Hamburger said the outlook for 2026 is bleaker unless the database giant appeases investors worried about the costs of its artificial intelligence boom. They pointed to a funding gap, a swelling balance sheet and the obvious risk of obsolescence as threats around Oracle mounted.
Figures from ICE Data Services show that the cost of insuring corporate debt rose to 1.25 percentage points over five years. Tyler and Hamburger said the swaps are on the verge of threatening the 2008 record as banks and investors hedge against borrowing that appears more hectic each month.
The pair wrote that credit default swaps could rise 1.5 percentage points in the near term and potentially approach two percentage points…
