Oracle Project Jupiter Loans Trade Below Par Amid Delays
Oracle faces pressure on $18 billion in loans for its New Mexico AI data center as infrastructure blocks and credit downgrades drive down debt value.
Approximately $18 billion in loans tied to Oracle and its Project Jupiter data center in New Mexico are trading at 89 to 91 cents on the dollar. The 1,400-acre campus in Doña Ana County was designed to provide AI computing capacity for OpenAI, but the project has encountered critical infrastructure and regulatory hurdles.
The state land office blocked a natural gas pipeline necessary to power the site's 2.2 gigawatt gas turbines. Additionally, the project faces local opposition regarding air quality and water supply. These delays have coincided with a July credit rating downgrade by S&P Global Ratings, which left Oracle one notch above junk status.
Because of the company's rising borrowing and the downgraded rating, efforts to sell the debt to new investors have stalled. As a result, syndicate banks including Santander and Jefferies are holding more project debt on their balance sheets than they originally intended.
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