Oracle data center loans slide to 89 cents
Syndicate lenders including Santander and Jefferies faced mounting pushback over water supplies and pipeline permits for the 1,400-acre Doña Ana County site.
A banking syndicate holding roughly $18 billion in loans for an Oracle-leased computing campus in New Mexico has marked the debt into stressed territory, following regulatory roadblocks and community pushback.123 The financial strain reflects growing resistance to large-scale artificial intelligence infrastructure, where massive utility demands frequently collide with municipal planning limits and environmental standards.
Lenders including Santander and Jefferies have privately quoted the debt between 89 and 91 cents on the dollar.32 Performing project debt typically changes hands within a narrow band near par value, making the discounted quotes a clear signal of investor caution.3 The debt package had secured an investment-grade rating from private credit agencies late last year, when the bank group arranged the $18 billion facility to finance early construction alongside billions in equity funding from Blue Owl.3
Mounting pressure on syndicated debt
The financing supports the 1,400-acre Project Jupiter development in Doña Ana County, a site designed to serve as a cornerstone of Oracle's $300 billion contract with OpenAI.32 Under that agreement, Oracle committed to supplying high-density computing capacity to train and operate advanced artificial intelligence systems.32 Oracle has been ramping up spending to finance its expansion into artificial intelligence infrastructure, while its rising debt load has drawn increasing investor scrutiny.2 Efforts by the underwriting banks to syndicate the construction debt to a wider group of institutional buyers have stalled as investors scrutinize Oracle's rising corporate borrowing and balance-sheet debt.23
Corporate credit rating agency S&P downgraded Oracle in July to one notch above junk status, leaving syndicate banks holding larger commitments on their balance sheets than originally planned.32 Shares of Oracle have declined 50 percent during the year following the announcement of the OpenAI agreement.3 Co-founder Larry Ellison, 82, also abruptly cancelled an established $7.5 billion share-sale schedule without providing an explanation to investors.3
Infrastructure hurdles in Doña Ana County
Much of the resistance to Project Jupiter stems from residents and local civic groups concerned about water supply depletion and regional air quality.32 Computing facilities of this scale require continuous cooling and substantial electric power, creating intense friction in arid regions. The Doña Ana County project was planned to run on 2.2 gigawatts of natural gas turbines, but the New Mexico State Land Office rejected an application to construct a pipeline delivering natural gas across state trust land.32
In response to the pipeline denial, Oracle announced an alternative energy strategy in April centered on Bloom fuel cells.3 The fuel cell units emit less sulfur and nitrogen oxides, but permission to connect a pipeline to feed them was also blocked.3
Regulatory roadblocks and political scrutiny
Environmental advocacy groups filed legal challenges that halted state review of the project's air quality permit in August.3 While a state court judge ruled that the permitting review could proceed, work on the complex has fallen behind schedule.3 Tracking data from market intelligence firm SynMax indicates that the initial phase of Project Jupiter is delayed by at least seven months, missing its target to become operational by November.3 The construction delays threaten Oracle's ability to deliver OpenAI computing capacity as promised, creating operational uncertainty around the long-term partnership.3
Political opposition has broadened as state elections approach. Deb Haaland, the Democratic nominee for governor of New Mexico and a former US Interior secretary, announced plans to enact a moratorium on new data center construction if elected, demanding substantial private investment in clean power generation before approving large facilities.3 Speaking at a press conference, Haaland said, "Big Tech's mantra may be 'move fast and break things', but here in New Mexico, we do things our way."3
State campaign disclosures show that Oracle contributed more than $12,000 to Haaland's campaign committee in late August.3 Though Oracle made the donation shortly before the general election, it remains uncertain how any future state moratorium would affect facilities already under construction.3 The combination of stalled debt distribution, protracted permitting reviews, and utility disputes in New Mexico leaves underwriting banks managing concentrated credit exposure while Oracle attempts to meet its delivery commitments for OpenAI.
What this rests on
23 sentences trace to 3 sources.
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https://x.com/carlquintanilla Document · x.com · 19 Sep 2026 $18B in Oracle-Leased Data Center Loans Enter Stressed Territory See the source
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ET CIO Third-party reporting · cio.economictimes.indiatimes.com · 19 Sep 2026 Oracle See the source
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TheOutpost.ai Third-party reporting · theoutpost.ai · 19 Sep 2026 Oracle's $18bn Data Centre Debt Slides to 89 Cents See the source