💸Oracle Files $20 Billion Stock and Bond Sale as Shares Drop 33%

Oracle's debt problem just became your cloud pricing problem

Oracle just filed to raise $20 billion, split evenly between stock and bonds, and the market's reaction tells you how nervous everyone is. The shares tumbled 8.8% on the day the filing dropped, after a brief bounce from the investor day. Why should you care? Because Oracle is spending heavily on data center capacity for AI, and the way it funds that spending affects the cloud platform you may be building on. Oracle says it will pull back to positive free cash flow by the second half of 2028 using vendor financing, customer-provided hardware, and customer prepayments. Those are unusual levers, and they tie Oracle's balance sheet to its customers' commitments. The numbers are rough. Oracle carries $125.34 billion in debt as of August 31. Its five-year credit default swaps sit at 292, up 265% in a year, after a July downgrade to BBB-. The 4.95% bond due 2031 now yields 7.276%. Oracle still forecasts at least $225 billion in fiscal 2030 revenue, so the bet is that growth outruns the debt. Watch the 2028 free cash flow target. If Oracle misses it, expect pricing and credit terms to shift.