Overview
- S&P Global lowered Oracle’s long-term rating to BBB- in July, leaving the company one notch above junk and prompting markets to reprice the stock and debt.
- Oracle’s fiscal 2026 results showed negative free cash flow, about $129.5 billion of reported debt and roughly $260 billion of signed data‑centre leases that analysts treat as added leverage.
- The company told investors it expects fiscal 2027 capital spending of up to $95 billion with up to $25 billion in customer repayments to offset some costs.
- Markets have punished the company: the share price roughly halved since June, bond yields have jumped into the 7%–8% range, and five‑year credit‑default swaps hit multi‑year highs.
- Ratings firms and analysts warn leverage could rise further toward downgrade triggers — including a sustained debt/EBITDA above 4.5x — forcing Oracle to tap expensive debt, curb buybacks or raise equity and risking strained project financing for its data centres.