Banks Struggled to Sell Oracle Data Center Debt
The $18 billion loan for a massive New Mexico campus has faced cooling investor demand as credit ratings slip.
Updated on Sept. 18, 2026 in Data Centers
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Syndicate banks have struggled to offload $18 billion in loans for an Oracle-leased data center in New Mexico, with recent quotes falling to 89 to 91 cents on the dollar. The project is a key component of the $500 billion Stargate infrastructure initiative.
Why it matters
Investor caution has intensified following an S&P credit rating downgrade for Oracle in July 2026, highlighting concerns over the company's rising debt levels. The struggle to move this debt reflects broader market anxiety regarding the massive capital commitments required to scale AI infrastructure.
The loan for the 1,400-acre Doña Ana County facility is trading at a significant discount to par value. This financial pressure arrives as Oracle projects $95 billion in capital expenditure for fiscal 2027 against expected customer repayments of $25 billion.
The players
Oracle
A multinational computer technology company providing enterprise software, cloud hardware, and infrastructure to support AI development.
OpenAI
An artificial intelligence research organization that develops large-scale machine learning models and requires massive computing capacity.
Santander
A global financial services firm acting as a member of the loan syndicate for the Stargate infrastructure projects.
Jefferies
A multinational investment bank and financial services company involved in underwriting and managing project debt.
The details
The facility is part of the Stargate initiative, a massive infrastructure project involving OpenAI, SoftBank Group, and Oracle designed to build out AI computing capacity. Loans were initially secured by a syndicate including Santander and Jefferies in late 2025. Oracle and OpenAI entered an agreement to provide the specific AI computing capacity that underpins the development of this 1,400-acre campus.
Timeline
Late 2025: The $18 billion loan package was secured.
July 2026: S&P downgraded Oracle’s corporate credit rating to one notch above junk status.
September 18, 2026: Loans were quoted at 89 to 91 cents on the dollar.
Fiscal 2027: Oracle projects $95 billion in total capital expenditure.
The Tech Race
The struggle to syndicate this debt marks a departure from the previously easy credit environment that fueled the rapid expansion of AI data center campuses. This development tests the financial feasibility of the $500 billion Stargate infrastructure initiative as participants navigate high capital demands.
The financial strain on this project may slow the delivery timeline for AI computing capacity tied to the Stargate initiative. Businesses relying on future Oracle-based AI infrastructure should monitor the status of these capital projects as the company balances $95 billion in projected spending.
The takeaway
The widening discount on this debt signals cooling investor appetite for long-term, capital-intensive AI infrastructure bets. Watch for future quarterly reports to see if Oracle adjusts its $95 billion capital expenditure projection for fiscal 2027 in response to these financing headwinds.
Further reading
For broader trends in infrastructure financing, explore the latest reporting on Data Centers.
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