Oracle's $18 Billion New Mexico Data Center Loans Are Being Quoted at 89 Cents on the Dollar

Since securing $18 billion in bank financing late last year to break ground, Oracle's Project Jupiter data center campus in Doña Ana County, New Mexico, is now facing a rockier debt market than the one it launched into. Banks trying to sell that loan package to a wider pool of investors have stalled, with the debt quoted at 89 to 91 cents on the dollar by syndicate banks including Santander and Jefferies, the Financial Times reported Friday, September 18, in a story picked up by Reuters.

A loan trading below par signals the market thinks it's riskier than when it was priced.

Why the discount

The 1,400-acre Project Jupiter site is part of Oracle's broader agreement with OpenAI to supply AI computing capacity under the $500 billion Stargate initiative, which also involves SoftBank Group. Oracle's own credit picture has deteriorated since the loans were arranged. S&P cut Oracle's corporate rating to BBB- in July 2026, one notch above junk, according to Reuters and Crypto Briefing. A single further downgrade would push Oracle into sub-investment-grade territory, which triggers automatic selling by large classes of institutional bondholders and drives up borrowing costs across the board.

Oracle's credit default swaps climbed to roughly 2.03% in July, according to Crypto Briefing, a level the outlet described as near 18-year highs. Oracle's net debt is projected to exceed $105 billion by late 2026, with fiscal 2026 capital expenditure that came in above $55 billion and negative free cash flow of around $24 billion. Oracle itself is forecasting up to $95 billion in capital expenditure for fiscal 2027, against an expected $25 billion in customer repayments.

Separately, bondholders have filed lawsuits alleging Oracle failed to adequately disclose the full scope of its financing needs when it issued $18 billion in bonds in September 2025, according to Crypto Briefing. Oracle has not publicly responded to those allegations in the sources reviewed, and no court has ruled on the claims.

The New Mexico factor

Project Jupiter was originally designed to run on 2.2 gigawatts of gas turbines. New Mexico's state land office blocked a request to run a natural gas pipeline to the site, according to the Financial Times report carried by Reuters, forcing Oracle to pivot toward renewable energy infrastructure instead. The redesign carries real cost and timeline consequences.

Local opposition in Doña Ana County has centered on fears the project will strain water supply and degrade air quality, the FT reported. Reuters noted Oracle, Santander and Jefferies did not respond to requests for comment on the financing strain.

The funding-behind-opposition question

Fox News Digital has reported separately that national anti-data-center organizing carries financial backing from progressive networks. Power the Future's Larry Behrens told Fox News Digital the opposition looks like "a playbook we've seen before," pointing to groups like Public Citizen, which lists George Soros' Open Society Foundations among its funders, and the Sierra Club, which received $3.6 million from Arabella Advisors' Sixteen Thirty Fund between 2014 and 2022. Fox News Digital also reported CodePink has received funding linked to Neville Roy Singham, who the outlet says has ties to the Chinese Communist Party.

That reporting focuses on activism in Texas, including a Texas Data Center Rebellion convening in San Antonio and a July forum in Austin. None of the sources reviewed here tie those specific funding networks to the New Mexico land office's decision to block Oracle's gas pipeline, which was made by a state regulatory body, not an activist coalition.

National data center opposition has documented ties to major progressive donor networks, while New Mexico's Project Jupiter delay traces to a specific state agency ruling on a pipeline request amid local water and air quality concerns.

What's unresolved

Oracle has not said how it plans to close the gap between what banks arranged and what the market will actually absorb at par. A second S&P downgrade would push Oracle into junk territory, a threshold that reshapes who's legally allowed to hold the debt. Whether Santander and Jefferies keep eating the difference on their own balance sheets, or whether Oracle sweetens terms to move the paper, is the next thing to watch. Separately, Oracle's data-privacy class-action settlement, unrelated to the data center financing, is set to begin paying out $36.45 per claimant starting September 21, according to the settlement's own administration site, a reminder that Oracle is managing legal and financial exposure on more than one front this fall.