Oracle's Massive Data Centre Financing: A Deep Dive
Oracle needed the world’s biggest bond fund to finance the world’s biggest data centre.
April 25, 2026 - 6:15 pm
The Deal:
In a significant move, Oracle secured $16.3 billion in financing for a single data centre campus in Saline Township, Michigan—the largest single-facility technology debt package ever assembled. This funding was necessary due to US banks' withdrawal from the deal, questioning the viability of AI infrastructure demand.
Key Players and Structure:
- PIMCO: The world’s largest active fixed-income manager, invested approximately $10 billion in the bond tranche, according to Bloomberg.
- Other Investors: The capital stack includes $2 billion in equity from Related Digital Infrastructure and Blackstone.
- Bank of America: Structured the deal.
- Goldman Sachs and Wells Fargo: Advised Related Digital.
The financing supports a data centre campus designed to exceed one gigawatt of capacity, serving as a hub for both Oracle and OpenAI's Stargate project—a joint venture with SoftBank, at the forefront of American AI infrastructure spending.
Financial Details:
- Coupon Rate: 7.5%
- Maturity: 19.5 years, with six years of interest-only payments followed by 13 years of amortization.
Given the project finance structure, investors are lending against the Michigan campus's projected cash flows rather than Oracle’s corporate creditworthiness. This premium reflects the risk involved but also ensures a substantial return on investment.
Concentrated Risk:
Oracle's $553 billion in remaining performance obligations, reported in Q3 of fiscal 2026, underpins this financing. However, a significant portion relates to OpenAI, posing a concentrated risk factor.
TD Cowen noted earlier this month that US banks have been reluctant to finance Oracle data centres, raising concerns about the sustainability of AI infrastructure demand at such a large scale. This led PIMCO to step in as the primary anchor for this substantial bond offering.