GoKawiilJPMorgan, Morgan Stanley, SMBC, MUFG seek to offload AI data center debt
According to the Financial Times, JPMorgan, Morgan Stanley, SMBC and MUFG are exploring significant risk-transfer deals to shift portions of AI data center debt off their balance sheets, after racing to underwrite such loans for projects tied to Oracle and Meta. One case cited by Bloomberg involves $38 billion in construction debt for an Oracle-leased data center project in Texas and Wisconsin, which a bank group including JPMorgan and MUFG has spent over six months trying to distribute, with some lenders now selling pieces at a discount to non-bank buyers.
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The banks' push to redistribute risk suggests they are running into internal limits on how much AI-linked exposure they can hold, which could signal unease about concentration risk in the sector even as lending continues. Man Group's Matthew Moniot told the Financial Times the deal sizes are unlike anything he has priced before, indicating the market may be straining to absorb this debt at normal terms. Oracle's rising credit-default-swap costs and its BBB- rating from S&P, alongside its reported plans for more than $40 billion in new debt and equity, point to growing investor caution about the company's financial position within this buildout.
- Four major banks are exploring risk-transfer deals to offload AI data center debt they recently underwrote.
- A $38 billion Oracle-linked construction debt package has taken over six months to distribute, with some pieces sold at a discount.
- Oracle's credit default swap costs have hit 2009-era levels and its credit rating sits just above junk, reflecting investor concern.
Source: startupfortune.com — Janet Harrison, 2026-10-14
Published there as: “Banks are now trying to offload the AI data center debt they just underwrote”
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