"In a filing which is yet to be reviewed by the county clerk, a class action lawsuit led by the Ohio Carpenters' Pension Plan alleges that the initial $18 billion bond offering was accompanied by "false and misleading" documents which "omitted to state that, at the time of the Offering, Oracle would require a significant amount of additional debt to build the AI infrastructure ... which would ultimately bring the creditworthiness of these bonds into question.""
"The claim says that the bond market's reaction to Oracle's additional debt was "swift and bracing." "Oracle's Senior Notes began to trade with yields and spreads similar to lower-rated issuers as investors began to demand higher yields due to perceived credit risk," the suit alleges. As a result, bond-holders bringing the class action suit "suffered significant losses and damages"."
Oracle raised $18 billion in debt bonds in September to help fund large datacenter investments aimed at meeting AI model builders and enterprise demand. Securities and Exchange Commission filings said the bonds were sold to raise cash for a number of activities, including capital expenditures. Oracle had earlier reported signed but unpaid cloud contracts worth $455 billion. Weeks later, media reported a planned additional $38 billion debt offering for datacenters to support an Oracle-OpenAI agreement. A class action led by the Ohio Carpenters' Pension Plan alleges the initial offering omitted the need for significant additional debt, hurting bond creditworthiness and causing investor losses. Oracle declined to comment, and other parties acted on concerns about increased borrowing.
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