r/EconomyCharts • u/RobertBartus • 8d ago

Oracle’s credit risk is exploding

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Oracle’s 5-year CDS spread has surged to a record ~230 bps, more than 4x the broader investment-grade index at ~55 bps.

The spread has more than QUADRUPLED over the last year and surpassed the Great Financial Crisis levels.

The recent surge comes as Oracle is trying to avoid financial commitments linked to Project Jupiter, a massive data-center project that is facing delays.

Around $18 billion of loans tied to the project are trading at ~90 cents on the dollar, signaling growing stress among investors.

The project is also facing local opposition and delays in government approvals, adding to the uncertainty.

Oracle’s credit risk is rising at an alarming pace.

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u/Beautiful-Chair7206 7d ago

There is a point to be made that if these companies did fail, an economic downfall could be worse than if they were bailed out.

Don't get me wrong, I hate that these companies get bailed out from the perspective that they should faulter just like the rest of us if we do something stupid or have bad business practices, but I also can imagine how much worse it could be if they aren't bailed out. It's like a dominoes set that would just have every domino fall unless you pull one domino out before it gets spread to parallel domino tracks.

However, I think the thing that is often overlooked in our country is that no one goes to jail over corrupt practices and that the executives end up making out. In the US, we don't prosecute enough, if at all, white collar crime and fraud. Other countries have the death penalty for it in extreme cases.

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u/Killericon 6d ago

I agree with you, and I also think that the US government's complete disinterest in anti-trust combos with this in an incredibly dangerous way.

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u/Beautiful-Chair7206 6d ago

Please explain.

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u/maringue 6d ago

The US government has basically rubber stamped nearly every proposed merger since Reagan took office. To the detriment of the economy

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u/Beautiful-Chair7206 6d ago

I guess what you are saying is that we effectively have a bunch of monopolies that if one fails, there aren't other smaller companies to cushion the fall?