Oracle closes $16.3 billion data centre financing, largest single-facility tech debt package ever

Oracle has closed a $16.3 billion financing package for a single data centre campus in Saline Township, Michigan, the largest single-facility technology debt package ever assembled. PIMCO, the world’s largest active fixed-income manager, purchased approximately $10 billion of the roughly $14 billion bond tranche after US banks retreated from the deal, citing doubts about the sustainability of AI infrastructure demand at Oracle’s projected scale. The bonds carry a 7.5% coupon with a 19.5-year maturity, structured with six years of interest-only payments followed by 13 years of amortisation. Bank of America structured the deal, while Goldman Sachs and Wells Fargo advised Related Digital. Approximately $2 billion in equity came from Related Digital Infrastructure and Blackstone. The financing is secured against the Michigan campus itself rather than Oracle’s corporate balance sheet. The Michigan campus is designed to exceed one gigawatt of capacity and will serve as infrastructure for Oracle and OpenAI’s Stargate joint venture, announced in January 2025 with SoftBank. The financing is part of $72 billion in total data centre partner debt Oracle has assembled across Michigan, Texas, Wisconsin, and New Mexico. Oracle’s capital expenditure for fiscal 2026 is expected to reach approximately $50 billion, more than double the prior year. Oracle’s remaining performance obligations stood at $553 billion in Q3 of fiscal 2026, providing a demand signal that underwrites the financing. However, a significant share of those obligations traces back to a single counterparty, OpenAI. S&P and Moody’s have both assigned negative outlooks to Oracle’s BBB and Baa2 credit ratings respectively.