Oracle Raises $18 Billion in US Debt Market
Date: 2025-09-26 Author: Henry Casey Categories: BUSINESS
On September 24, Oracle completed a massive $18 billion bond offering, the second-largest deal in the US debt market in 2025. The primary objective of the capital raising is to capitalize on the accelerated development of cloud technologies and artificial intelligence, which the company is actively betting on.
Investor interest exceeded all expectations: orders reached nearly $88 billion from an initial six-tranche offering. The package also included a rare 40-year bond, which yielded 1.37 percentage points higher than comparable Treasury bonds, beating initial estimates. However, one of the planned floating-rate issues was cancelled.
According to sources, the funds raised will be used to expand data center infrastructure, invest in new projects, and finance capital expenditures. This strategy is directly linked to the growing number of contracts in the cloud sector. Oracle's largest partners include OpenAI and Meta Platforms, which create long-term commitments to provide computing power.
Despite efforts to strengthen its position, the company has long trailed Amazon, Microsoft, and Google in the cloud services market. However, new agreements have helped partially narrow the gap. At the same time, the company's debt burden is increasing: in August, the company's total outstanding liabilities reached $95 billion. This figure will increase after the new offering, but credit agencies maintain high ratings for now. CreditSights estimates that the corporation will need to issue another $65 billion in bonds by 2028.
Experts note that for the first time since 1992, Oracle's cash flow has turned negative. Analysts expect this trend to continue until at least the end of the decade. Nevertheless, investors continue to show strong interest in the company's shares, given the promising nature of its technology businesses.
The context of the deal is also important: September was a record month for the entire US debt market. According to Bloomberg, bond sales exceeded $190 billion, the highest volume since the beginning of last year.
Thus, Oracle's offering reflects two trends: increased competition in the cloud segment and a general increase in activity in the US corporate debt market. It was previously reported that the company is also considering a multibillion-dollar deal with Meta for cloud computing for AI, highlighting its strategic development vector.
