Oracle's newly issued investment-grade bonds have a higher yield than the highest-rated junk bonds

AASTOCKS
2025.12.15 02:05

According to a report by Bloomberg, the prices of Oracle's (ORCL.US) newly issued investment-grade bonds have fallen. According to Trace, the 5.2% coupon bonds maturing in 2035 saw their yield spread over U.S. Treasuries of the same maturity widen by 17 basis points to 1.71%, with the yield rising to 5.9%, higher than the average yield of 5.69% for the highest-rated basket of junk bonds (non-investment grade), despite the latter having a shorter duration. The premium on these bonds at issuance was 1.05% over U.S. Treasuries of the same maturity.

Additionally, according to ICE Data Services, the cost to protect Oracle's debt from default rose by as much as 14.4 basis points to 151.3 basis points last Friday, the highest level since 2009.

The report indicated that investors who purchased $18 billion of high-rated bonds issued by Oracle in September of this year currently face a total paper loss of approximately $1.35 billion

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