Oracle CDS Premium Hits Record High at 198.23 Basis Points; S&P Downgrades to BBB-

According to ICE Data Services, Oracle's credit default swap (CDS) premium hit a record high of 198.23 basis points on Friday (July 17), rising about 10 basis points. The surge reflects investor concerns over the company's massive artificial intelligence infrastructure investments and their ability to generate adequate returns.

S&P Global Ratings downgraded Oracle's credit rating to BBB-, the lowest investment-grade tier, citing capital expenditures for AI expansion that significantly exceeded prior estimates. Moody's Ratings maintained a negative outlook, signaling further downgrade risk. Oracle's operating free cash flow has turned negative amid the ongoing data center build-out to support AI computing demand. The company has approximately $117 billion in corporate debt outstanding.