Oracle credit default swaps rise to a record high, sparking investor concerns

BlockBeats News, on July 24, Oracle's 5-year credit default swap (CDS) rose to a record high of about 203 basis points. This means the company now pays about $203,000 annually to purchase default protection for every $10 million in debt. Oracle's CDS has more than quadrupled since mid-2025, even surpassing the peak seen during the 2008 financial crisis.

On the other hand, the company's borrowing costs are also rising. The spread on its 6.7% bond maturing in 2056 widened by +8 basis points on Monday, to 263 basis points; the spread on its 5.7% bond maturing in 2036 widened by +9 basis points, to 205 basis points.

Meanwhile, S&P Global Ratings downgraded Oracle on July 9 to BBB-, only one notch above junk status, due to rapidly growing AI-related spending. Oracle's credit risk has reached crisis levels.