Banks are now trying to offload the AI data center debt they just underwrote
Major banks are trying to shed AI data-center loans, including $38 billion tied to Oracle sites.
JPMorgan, Morgan Stanley, SMBC, and MUFG are exploring significant risk transfers to reduce AI-linked loan exposure, the Financial Times reported. A group including JPMorgan and MUFG has spent more than six months trying to distribute $38 billion of construction debt for Texas and Wisconsin data centers leased to Oracle, with some lenders willing to sell at a discount. Oracle five-year credit default swaps rose to about 151 basis points, and S&P rates Oracle BBB-. Bonds from Alphabet, Amazon, Meta, Microsoft, and Oracle have also seen weaker demand and wider spreads than similarly rated non-AI debt.
- JPMorgan, Morgan Stanley, SMBC, and MUFG are shopping AI loan risk.
- A $38 billion Oracle data-center loan has sat unsold for six months.
- Oracle CDS hit about 151 basis points; S&P rates it BBB-.
- Investors prefer Microsoft and Google leases over weaker AI credits.
- Countries
- United States
From the original article
4 min read at startupfortune.com
JPMorgan, Morgan Stanley, SMBC and MUFG are quietly shopping pieces of the AI debt pile they helped build, a sign the lenders closest to the money have started hedging their own bet. Six months ago, banks were racing each other to underwrite data center loans tied to Oracle, Meta and the rest of the AI buildout. Now some of the same banks are trying to get that debt off their books.
By smartmic · startupfortune.com
A short excerpt; the article and its images belong to the publisher. Summary, key facts and assessment above are AI-written from the article and can be wrong.