MediumV Technology Geopolitics & AI2 November 2026, Monday
Oracle seeks 20 billion dollars in a day to fund AI build-out
Oracle launched a 10 billion dollar bond sale on 2 November and filed the same day for a 10 billion dollar equity offering. The shares closed down about 9% according to Yahoo Finance, and 8% according to CNBC.
According to Yahoo Finance, the company burned through about 24 billion dollars of cash in its last fiscal year, and its debt stood at about 125 billion dollars as of August, almost twice its equity. Fitch held its rating at BBB, two notches above the investment-grade threshold, while Moody's affirmed its rating but kept a negative outlook. The shares lost about 18% over 3 sessions, their worst three-day run since 2002.
Credit default swaps, the insurance bondholders buy against default, show where the 125 billion dollar debt load sits. On Yahoo's chart, Oracle's 5-year CDS is around 300 basis points, roughly 5 times Microsoft's. CAPP Notes, citing CNBC's use of S&P Global data, puts the level at 292 basis points and the one-year increase at 265%.
The yield curve shows the same divergence. Oracle's 2066 debt yields about 8.4%, while Apple and Microsoft paper maturing in 2062 yields about 6.1%. CoreWeave, which leases AI infrastructure, pays more than 14%. As of the evening of 3 November the sources reviewed did not show the pricing of the new bonds, which could not be verified.
Talay assessment
Bottom line
Oracle split the financing of its AI infrastructure evenly between shareholders and bondholders, a sign that relying on debt alone has become expensive. CDS at roughly 5 times Microsoft's says the market is pricing AI risk balance sheet by balance sheet rather than at sector level. The most likely path is a completed raise at a high cost, with rating pressure persisting.
Likely effects
- Technology creditNegative1–6 months
The cost to a BBB issuer burning 24 billion dollars a year lifts the borrowing floor for lower-rated AI spenders; CoreWeave's yield above 14% marks the far end.
- Capital expenditureNegative1–6 months
Asking shareholders for 10 billion dollars signals debt capacity nearing its limit, tying the data centre build schedule to financing costs.
- Credit protectionNegativeWeeks
5-year CDS in the 292–300 basis point band shows default protection on this balance sheet getting dearer and protection capacity tightening.
Possibilities, ranked
- 1Expensive but open door55%
The raise is completed, CDS stays in a high band and the rating outlook is unchanged.
Watch: Oracle's 5-year CDS relative to around 300 basis points
- 2Rating pressure30%
Cash burn continues and Moody's turns its negative outlook into a downgrade.
Watch: A rating or outlook decision from Moody's or Fitch
- 3Confidence recovers15%
Fresh capital eases the balance sheet and default protection gets cheaper.
Watch: CDS falling well below 292 basis points
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- Bond issue▲ $10bn
- Equity issue▲ $10bn
- 5-year CDS▲ ~300 bp
- Debt (August)▲ $125bn