Oracle launches $20 billion stock and bond sale amid AI buildout

Oracle is raising $20 billion, split evenly between new common stock and new bonds, to pay for an artificial intelligence (AI) buildout that its filings say will require more data center capacity and new data centers. The software and cloud company set final terms Monday on $10 billion of senior notes in five pieces, with interest rates from 7% to 8.65%, according to a pricing term sheet filed with the Securities and Exchange Commission (SEC). A separate prospectus supplement filed the same day covers $10 billion of common stock.

The notes break down this way, according to the term sheet: $2 billion of 7.000% notes due Nov. 4, 2029; $1.75 billion of 7.450% notes due Nov. 4, 2031; $2.25 billion of 7.850% notes due Nov. 4, 2033; $2.5 billion of 8.000% notes due Feb. 4, 2037; and $1.5 billion of 8.650% notes due Nov. 4, 2046. They were priced to yield between 2.40 and 3.35 percentage points more than comparable U.S. Treasurys, the filing shows.

One piece of the original plan did not make it. Oracle’s preliminary notes prospectus, filed Monday, listed floating-rate notes due 2029 tied to the Secured Overnight Financing Rate (SOFR), a benchmark for short-term borrowing. The final term sheet lists only the five fixed-rate series, which together add up to the full $10 billion.

What’s driving it

Oracle says it needs the money to keep building. In its stock prospectus, the company lists among its expectations that “current and expected customer demand will require continued growth in our cloud and software expenses and capital expenditures in order to increase our existing data center capacity and establish additional data centers in new geographic locations.” The same filing names the challenge of securing “reliable and cost-effective power sources for our data centers.”

Both prospectuses say the net proceeds will go to general corporate purposes, “which may include capital expenditures, repayment of indebtedness, future investments or acquisitions and payment of cash dividends on or repurchases of our common stock.”

Our read

The coupons are the story. Oracle will pay 7% to borrow for three years and 8.65% for twenty, at spreads up to 3.35 percentage points over Treasurys. Those are high costs for a company of Oracle’s size, and they show that lenders want to be well paid before they fund AI data centers on credit. Oracle is also selling stock, which spreads the bill to shareholders through dilution instead of loading it all onto the balance sheet. That makes sense for a company that, according to the stock prospectus, already carried about $236.1 billion of debt as of Aug. 31. Dropping the floating-rate tranche leaves Oracle with fixed costs it can plan around, but locks in today’s rates for as long as 20 years. This sale is the first real test of whether investors will fund the buildout at prices that still work for Oracle. If its data centers fill with paying customers, the math holds. If demand slows, these interest payments do not.

Who has a stake

Existing shareholders face dilution from the new shares. The stock prospectus warns that sales or issuances of common stock, “or the perception that these sales or issuances may occur,” could lower its market price. Oracle also agreed not to sell more shares for 60 days without the underwriters’ consent, the filing says. Bondholders rank ahead of stockholders: the stock prospectus says the new shares “will rank junior to the Notes.” BofA Securities is the global coordinator on both deals, and a long list of banks, including Wells Fargo, Citigroup, J.P. Morgan and Goldman Sachs, are joint book-running managers, according to the filings.

What’s next

The notes are scheduled to settle Nov. 4, according to the term sheet, with the first interest payments due Feb. 4, 2027, on the 2037 notes and May 4, 2027, on the rest. The two offerings do not depend on each other: the filings say neither one’s closing is conditioned on the other’s. Oracle has yet to file its final stock prospectus, which will show the share count and price.

Sources: Oracle preliminary prospectus supplement (Form 424B5) for common stock, Nov. 2, 2026; Oracle preliminary prospectus supplement (Form 424B2) for senior notes, Nov. 2, 2026; Oracle final pricing term sheet (free writing prospectus) for senior notes, Nov. 2, 2026