Oracle data center secures $16 billion financing after months of Wall Street negotiations

Oracle Data Center $16 Billion Financing Gets Over The Line

The debt is part of a larger $16 billion financing package that will fund the data center in Saline Township in southeastern Michigan, where Oracle is the tenant and aims to use the campus to power applications for OpenAI. A $16 billion financing for a giant Oracle Corp. data center in Michigan has wrapped after months of stop-and-start negotiations with investors. Bank of America Corp. sold $14 billion of bonds tied to the project, in a debt sale that was anchored by Pacific Investment Management Co., according to a statement by the data center developer Related Digital. Pimco bought about $10 billion of the bonds that priced Friday, while other investors bought the remainder of the debt, according to people with knowledge of the matter, who asked not to be identified because they're not authorized to speak publicly. The debt is part of a larger $16 billion financing package that will fund the data center in Saline Township in southeastern Michigan. Oracle is the tenant and aims to use the campus to power applications for OpenAI, Bloomberg has reported. The financing includes equity from Related Digital and funds affiliated with Blackstone Inc. The latter contributed about $2 billion of the equity, Bloomberg previously reported. The bonds were sold privately in a 144A offering, meaning they can only be bought by large institutional investors, the people said. The notes, which mature in 2045, were priced at 98.75 cents on the dollar and carry a 7.5% coupon, according to some of the people and Bloomberg-compiled data. A representative for Pimco declined to comment on the details of the bond financing, while representatives for Oracle also didn't immediately comment on financing details. Those for Bank of America and for Wells Fargo & Co. and Goldman Sachs Group Inc., who were also involved, didn't immediately respond to comment requests. Related Digital, a venture of New York-based property developer Related Cos., said the project will play a critical role in America's digital future. Debt Logjam The protracted process involving the project in Michigan's Saline Township shows how Big Tech's debt-fueled AI splurge is running into more intense scrutiny from Wall Street. The financing follows other massive debt packages that banks assembled for Oracle data centers: a $38 billion debt deal to build facilities in Texas and Wisconsin, and $18 billion for a New Mexico site. DTE Energy Co. is supplying power to the project, while Oracle is financing a new battery storage investment, according to the statement. The Saline Township campus will include three single-story data center buildings with more than a gigawatt of capacity. The project is being developed for Oracle as part of its partnership with OpenAI to expand AI compute capacity across the country. The biggest technology companies are pouring hundreds of billions of dollars into data centers and other infrastructure as they bet artificial intelligence will reshape large parts of the economy. Much of that money is coming from debt markets. Since last year, at least $290 billion of debt financing has been arranged for hyperscaler projects. Oracle has become one of the largest high-grade corporate bond issuers in the US, with about $120 billion of notes in the main US corporate bond index. In early February, it sold $25 billion of bonds.

Related Digital secures financing for $16 billion Oracle data center in Michigan

April 24 (Reuters) - Data center developer Related Digital said on Friday it has secured financing for a $16 billion data center campus it is building in Michigan for Oracle (ORCL.N), opens new tab. The ⁠financing includes equity from Related Digital and funds affiliated with Blackstone (BX.N), opens new tab, and fixed-rate, long term debt financing anchored by PIMCO-managed funds and accounts, the company ⁠said. OpenAI, Oracle and Related Digital in October announced the project of a more ⁠than 1 gigawatt data center in Saline Township, Michigan, as ⁠part of their push to expand U.S. ⁠AI infrastructure capacity. Reporting by Fabiola Arámburo in Mexico City; Editing by Chris Reese Our Standards: The Thomson Reuters Trust Principles., opens new tab

Related Digital secures financing for $16 billion Oracle data center in Michigan

April 24 (Reuters) - Data center developer Related Digital said on Friday it has secured financing for a $16 billion data center campus it is building in Michigan for Oracle. The financing includes equity from Related Digital and funds affiliated with Blackstone, and fixed-rate, long term debt financing anchored by PIMCO-managed funds and accounts, the company said. OpenAI, Oracle and Related Digital in October announced the project of a more than 1 gigawatt data center in Saline Township, Michigan, as part of their push to expand U.S. AI infrastructure capacity. (Reporting by Fabiola Arámburo in Mexico City; Editing by Chris Reese)