S&P Global Ratings / Reuters / Bloomberg · 2026-07-10
S&P Global Ratings Downgrades Oracle to 'BBB-', One Notch Above Junk, on Exploding AI Capex and $42B Free-Cash-Flow Deficit
S&P cut Oracle's long-term issuer credit rating from BBB to BBB- (stable outlook) and its short-term rating from A-2 to A-3, citing 'rising business risk and weaker cash flow' from its AI infrastructure buildout. FY2026 capex hit $55.7B (+162% YoY), generating negative FCF of $23.7B; S&P now projects FY2027 FCF deficit widening to ~negative $42B and adjusted debt/EBITDA climbing to the mid-4x range. With $167B in total debt and OpenAI representing roughly half of remaining performance obligations, a further one-notch cut would push Oracle to sub-investment-grade — a potentially forced-selling event for IG-only funds. Oracle plans to raise ~$40B more in debt and equity in FY2027, including a $20B ATM equity offering, to defend the rating.
Bloomberg / Reuters · 2026-07-07
Amazon Prices $25 Billion Eight-Tranche Bond Sale for AI Infrastructure; Demand Falls Sharply to 1.6x Cover vs. 14.8x in March
Amazon priced an eight-part senior unsecured deal (maturities 2029–2066, including 40-year paper at T+145bp) raising at least $25B to fund its ~$200B 2026 AI capex plan. Peak demand reached $62B but was pared to ~$41B after banks tightened spreads — a 1.6x cover ratio that compares starkly to the $370B demand on its March $37B offering. The cooling of orderbook appetite is the clearest market signal yet of potential investor fatigue in hyperscaler paper, even from the highest-rated borrowers. Amazon has now raised ~$89B in bonds in 2026 alone and told underwriters this will be its last dollar bond of the year.
Bloomberg / Yahoo Finance (bond-market coverage) · 2026-07-09
CoreWeave's June 9.625% Senior Notes Slump to 96.50 (10.42% Yield) as Meta Competition Risk and Heavy AI High-Yield Supply Weigh
CoreWeave's par-priced June 11 offering of 9.625% six-year senior notes fell to 96.50 cents on the dollar (implying a 10.42% yield) within weeks of pricing — a significant move below par that reflects two converging pressures: (1) Meta's announced plans to build its own GPU compute capacity, threatening CoreWeave's largest customer relationship, and (2) a glut of AI high-yield supply ($31.9B YTD through July 8). CoreWeave also trades north of 500bps over benchmarks, ~110bps wider than the next data-center credit below it, underscoring how the bond market prices merchant-compute risk far more harshly than contracted-infrastructure REITs like Digital Realty or Equinix. The broken-deal dynamic raises refinancing risk given CoreWeave's large near-term debt maturities.