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Credit Traders Hedge Against Oracle Default Risk as AI Spending Fuels Debt Concerns

Credit Traders Hedge Against Oracle Default Risk as AI Spending Fuels Debt Concerns

Author:

Global Cryptocurrency

Published:

2025-10-29 21:17:01

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BTCCSquare news:

Credit markets are flashing warning signals as traders ramp up purchases of credit default swaps on Oracle Corp. The tech giant's aggressive borrowing to fund its AI infrastructure push has pushed five-year CDS spreads NEAR October 2023 highs, with Morgan Stanley forecasting net adjusted debt could balloon to $290 billion by 2028.

JPMorgan analysts have reportedly encouraged the hedging activity, which intensified after Oracle's 2033 bonds widened 57 basis points in early trading. The moves reflect growing institutional unease about tech sector leverage, particularly as companies chase costly AI investments amid uncertain returns.

By:

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