Updated version 1 - According to the Financial Times, Oracle's $18 billion data center debt is under pressure.

Added details in paragraphs 2 and 9

Reuters, September 18 - According to the Financial Times on Friday, about $18 billion in loans related to the ORCL.N data center leased by Oracle in New Mexico are under pressure, with syndicated banks including Santander and Jefferies JEF.N pricing the loans at 89 to 91 cents on the dollar.

The Financial Times reported that this development comes amid growing concerns locally that the project could affect water supply and air quality, fueling opposition to the project, which could potentially hinder Oracle's large-scale plans for artificial intelligence infrastructure construction.

The 1,400-acre "Project Jupiter" park in Doña Ana County is part of a broader agreement between Oracle and OpenAI aimed at providing artificial intelligence computing capabilities.

According to media reports, the project secured an $18 billion loan from a group of banks at the end of last year to kickstart construction (link).

The Financial Times said efforts to sell this debt to a broader group of investors have stalled due to market concerns over Oracle's expanding borrowing and weakening credit rating.

Oracle, Santander, and Jefferies did not respond to Reuters' requests for comment.

(link) After a downgrade by S&P in July, Oracle's corporate credit rating now stands just one notch above junk status. According to the Financial Times, banks are now forced to hold more Oracle-related project debt on their balance sheets than originally planned.

Oracle has been increasing spending to support its expansion into artificial intelligence infrastructure, and its rising debt burden has drawn growing attention from investors.

The report said "Project Jupiter" was initially planned to be powered by a 2.2-gigawatt gas turbine, but the state’s Land Office rejected an application to lay a gas pipeline to the data center. Additional details: Local environmental groups have organized several protests and are pushing for an extensive environmental review, which could further delay the project.

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