Oracle-Linked $18 Billion AI Data Center Loans Come Under Pressure, FT Reports
About $18 billion in loans tied to an Oracle-leased AI data center project in New Mexico are being quoted below face value as lenders struggle to attract investors amid concerns over the company’s borrowing and local opposition, the Financial Times reported on Friday.
Syndicate banks including Santander and Jefferies were quoting the loans at 89 to 91 cents on the dollar, the newspaper said, implying a discount of 9% to 11%. Efforts to distribute the debt to a broader investor base have stalled, leaving banks holding more Oracle-linked project loans than intended, according to the FT report.
The financing supports Project Jupiter, a 1,400-acre campus in Doña Ana County that forms part of Oracle’s agreement to supply artificial intelligence computing capacity to OpenAI. A bank consortium provided the loans in late 2025 to fund construction.
The reported difficulty selling the loans highlights how concerns about a major tenant’s creditworthiness can compound the construction and permitting risks facing large AI facilities. Oracle’s corporate credit rating stands at BBB-, the lowest investment-grade tier, following a July downgrade by S&P Global Ratings.
Residents’ concerns about water supplies and air quality have added uncertainty to the project. New Mexico Land Commissioner Stephanie Garcia Richard rejected a request in July to reconsider an earlier refusal to allow part of a proposed natural gas pipeline across state trust land.
The applications covered a 0.6-mile segment of a planned 17-mile pipeline. The commissioner cited greenhouse gas emissions and pressure on water and other natural resources among the reasons for rejecting them, according to the State Land Office.
Oracle has revised the campus’s power design. In a July 28 update, the company said Bloom Energy fuel cells would replace previously planned gas turbines and diesel generators. It projected a roughly 92% reduction in nitrogen oxide emissions compared with the turbine plan.
The company also said the revised design would use no potable water for cooling or fuel-cell operation, with drinking water limited to ordinary employee needs. Its projections for the project’s economic benefits remained conditional on approval of the air permit and pipeline, Oracle said in the update.
