Oracle returns to the debt market with one of the largest emissions by 2025The company founded by Larry Ellison has placed 18 billion dollars in investment-grade bonds, the second-largest corporate issue of the year. The transaction, divided into six tranches, also includes a 40-year bond, an absolute rarity on the market, with a yield set at 1,37 percentage points above Treasuries of the same duration, down from initial indications.
The question was explosive with nearly 88 billion orders collected, a sign that investors continue to bet on big tech, even as the debt burden grows.
Cloud, artificial intelligence, and skyrocketing costs
The placement comes at a crucial time for the group. Oracle has signed strategic agreements with OpenAI, Meta and TikTok Usa (and is ready with a calso ordered to acquire the latter) to provide cloud infrastructure capable of supporting the explosion of artificial intelligence. But these agreements entail a dizzying leap in spending: the software giant will have to invest hundreds of billions of dollars in the next few years in data centers and energy consumption.
Not surprisingly, for the first time since 1992, the cash flow Oracle's stock has slipped into negative territory, with analysts estimating a return to growth only around 2029.
The challenge to the cloud giants
For years Oracle has been trailing the three industry leaders – Amazon, Microsoft and Google – but now aims to bridge the gapThe signed contracts project it into the heart of the global AI race, a market where competitive advantage is measured in computing power and speed of execution. The financial commitment is enormous and the debt already accumulated – approximately $95 billion at the end of August – risks rising further. Despite this, analysts believe the company will be able to maintain its investment-grade rating, thanks to growth prospects and an expanding customer base.
Oracle Announces Governance Changes
As it prepares to handle this leap in scale, Oracle has chosen to redesign its governance. Clay Magouyrk e Michael Sicilia were appointed co-CEOs, replacing Safra Catz. A decision that has divided the market. In the past, dual leadership had not yielded outstanding results, with the stock lagging behind its rivals. This time, however, the challenge is coordinating an unprecedented expansion, combining finance, technology, and industrial strategy.
