- Oracle (ORCL) issued a force majeure notice to Stack Infrastructure, a Blue Owl Capital (OWL) unit, covering Project Jupiter, a 2.45-gigawatt data center campus in New Mexico.
- The notice provides Oracle a contractual basis to defer rent payments if the campus misses its targeted 2028 opening, shifting construction delay risk onto the landlord and its lenders. The delay stems primarily from permitting for a natural gas pipeline needed to power the campus.
- $18 billion in construction loans for Project Jupiter trade at 89 to 91 cents on the dollar. S&P downgraded Oracle debt to BBB- near junk, CDS spreads hit record highs, and long-term bond yields breached 8%.
- ORCL fell 3.61% on Sep 28 as investors weighed AI infrastructure execution risk, double-digit percentage workforce reductions across select internal teams, and negative free cash flow of $5.4 billion.
- Oracle disclosed $260 billion in pending lease liabilities in its fiscal 2026 10-K, and the force majeure notice gives it a basis to contest lease commencement dates on that exposure.
Quotes
“This notice provides Oracle a contractual basis to defer rent payments if the campus misses its targeted 2028 opening, effectively shifting the risk of construction delays onto the landlord and its lenders”
“Oracle issued a formal force majeure notice to developer Stack Infrastructure regarding its 2.45-gigawatt Project Jupiter data center in New Mexico due to permitting, environmental, and infrastructure challenges.”
“Credit default swap (CDS) spreads on Oracle corporate debt jumped to record highs, and long-term bond yields breached 8% following S&P's downgrade of ORCL debt to BBB-”