November 2 (Reuters) – Oracle Corp (ORCL.N) announced on Monday that it plans to raise $20 billion through the issuance of bonds and shares, as the software giant seeks capital from investors to fund the development of its costly AI and cloud infrastructure.
Later that day, Oracle priced the 86.2 million shares offered at $116 per share—an 11.2% discount to Friday’s closing price.
The company will raise approximately $10 billion through a stock sale and another $10 billion through the issuance of bonds maturing between 2029 and 2046.
Shares of the company fell 8.8% to $119.22 early Monday following the announcement of a financing plan, bringing their decline for the year to approximately 39%.
Oracle stated that it intends to use the proceeds for general corporate purposes, including capital expenditures, debt repayment, acquisitions, dividend payments, and share repurchases.
Bloomberg News was the first to report the pricing details of the equity offering.
This financing highlights the scale of Oracle’s investments in artificial intelligence, as the company aims to more than triple its revenue by fiscal year 2030. Last week, Oracle indicated that capital expenditures would peak over the current and next fiscal years, while also pledging that additional funding for artificial intelligence initiatives through fiscal year 2030 would not exceed $20 billion.
On Wednesday, shares of Oracle Corporation rose by approximately 11% after Chief Financial Officer Safra Catz stated that the company expects its free cash flow to turn positive in the second half of fiscal year 2028.
As of August 31, Oracle’s total notes payable and other borrowings stood at $125.34 billion, while its revenue for fiscal year 2026 is projected to be $67.36 billion. The company anticipates that by fiscal year 2030, its revenue will exceed $225 billion, with adjusted earnings per share (EPS) surpassing $21.
According to data compiled by the London Stock Exchange Group (LSEG), Wall Street expects the company to report an adjusted EPS of $8.14 for fiscal year 2027.
The bond issuance consists of five fixed-rate tranches, with interest rates ranging from 7% to 8.65% and maturity dates spanning from 2029 to 2046. The final issuance does not include the floating-rate tranches that Oracle had outlined in previous regulatory filings.
Meanwhile, the price of Oracle’s existing 6.85% bonds maturing in 2066 fell by more than 1.2 cents, according to data from Tradeweb.
Investors are keeping a close eye on Oracle’s spending in the AI space, given that the company’s revenue scale trails that of its cloud-service rivals, Microsoft and Amazon, and it has made a significant investment in OpenAI—the loss-making developer of ChatGPT.