Banks Seek to Offload AI Data Center Debt, Including $38 Billion Oracle-Leased Project

The biggest names in finance are looking for the exits on the Super Intelligence buildout they helped bankroll. JPMorgan, Morgan Stanley, SMBC and MUFG have been exploring significant risk transfers, according to the Financial Times, as relayed by Startup Fortune.

The marquee example: Bloomberg reported that a group of banks including JPMorgan and MUFG has spent more than six months trying to distribute $38 billion in construction debt for a Texas and Wisconsin data center project leased to Oracle. Some lenders would sell to non-bank buyers at a discount. The reporting does not name those buyers or say how deep the discount goes.

Startup Fortune reports that Oracle's five-year credit default swaps climbed to around 151 basis points in early October, levels last seen in 2009, after S&P cut its rating to BBB- in July. The company is reportedly targeting more than $40 billion in additional debt and equity this fiscal year. "The sizes we're talking about . . . they're out of scale to anything we've thought about, ever," said Matthew Moniot of Man Group. "Banks very quickly start choking."

The context: this follows the pulled IPOs and rate pressure we covered, with the 10-year Treasury yield having reached 5.304% this month.

My take? When the people with the biggest checkbooks in the room start asking who wants a slice, that is the story. Staggering numbers, staggering stakes, and a very, very big table.