Bond market anxiety is growing over AI capex budgets
As concerns grow, Oracle's 5-year credit default swap, or CDS, is once again trading at a multi-year high. In a note to clients published on Wednesday, Barclays credit analyst Andrew Keches wrote that Oracle's CDS is once again being seen as a proxy for AI debt fears. The company has a growing relationship with OpenAI and hyperscalers like Meta and Nvidia, which are also working with Oracle on cloud architecture.Still, portfolio managers who spoke to CNBC said the move in tech bond yields could impact financing future deals.
- ▪As concerns grow, Oracle's 5-year credit default swap, or CDS, is once again trading at a multi-year high.
- ▪In a note to clients published on Wednesday, Barclays credit analyst Andrew Keches wrote that Oracle's CDS is once again being seen as a proxy for AI debt fears.
- ▪The company has a growing relationship with OpenAI and hyperscalers like Meta and Nvidia, which are also working with Oracle on cloud architecture.Still, portfolio managers who spoke to CNBC said the move in tech bond yields could impact fi
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As concerns grow, Oracle's 5-year credit default swap, or CDS, is once again trading at a multi-year high. In a note to clients published on Wednesday, Barclays credit analyst Andrew Keches wrote that Oracle's CDS is once again being seen as a proxy for AI debt fears. "The appeal of ORCL CDS in recent history has extended beyond company-specific fundamentals, reflecting its role as a liquid hedge on AI capex, OpenAI execution and broader data-center spending narratives," wrote Keches.Oracle is facing questions from investors about how active it plans to be in the debt market in the coming years, as the buildout and leasing of data centers continue to become more capital intensive.Earlier this month, ratings agency S&P Global downgraded Oracle's credit rating to BBB-, just one notch above…
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