Eos Energy stock falls after Fuzzy Panda issues short report
Investing.com -- Credit traders are increasingly purchasing protection against Oracle Corp. defaulting on its debt as the technology company continues massive investments in artificial intelligence infrastructure, Bloomberg reported Wednesday.
The cost to insure against Oracle defaulting on its debt over the next five years is currently near its highest level since October 2023, according to data from ICE Data Services.
Morgan Stanley analysts Lindsay Tyler and David Hamburger noted in a Monday report that "near-term credit deterioration and uncertainty may drive further bondholder and lender hedging." The investment bank is recommending investors buy Oracle’s five-year credit default swaps and five-year bonds.
The financial institution projects Oracle’s net adjusted debt will more than double to approximately $290 billion by fiscal year 2028 from around $100 billion currently.
Investors are seeking to protect their exposure as banks prepare to launch a $38 billion debt offering to fund Oracle’s data centers in Texas and Wisconsin. This would represent the largest debt deal for AI infrastructure to come to market, according to Bloomberg.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.