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Pimco Eyes $14B Oracle Data Center Sale
9 Apr
Summary
- Pimco is selling a portion of $14 billion in debt financing.
- The Oracle data center in Michigan has a $16.3 billion financing backing.
- Bonds offered to investors have a 19.5-year maturity and 14-year weighted average life.
Pacific Investment Management Co. is reportedly seeking to sell a portion of the $14 billion debt financing it is providing for a significant Oracle Corp. data center located in Michigan. This expansive campus in Saline Township has a total financing backing of $16.3 billion.
Approximately 15% of the total financing is expected to be an equity investment, with the remainder structured through bonds issued by a special purpose vehicle. Pimco is the primary financier for this deal, which is being led by Bank of America Corp. and is anticipated to be finalized on April 17.
The bonds carry a 19.5-year maturity and a 14-year weighted average life. Borrowers will initially pay interest only for six years, followed by a 13-year amortization period for the principal. These securities are being sold privately under a 144A format to institutional investors only.
Pimco is actively gauging investor interest, and the offered terms may be subject to change. To attract buyers, the bonds are expected to yield slightly over one percentage point more than Oracle's existing debt maturing in April 2040.
This venture marks Pimco's second major data center financing in the past year, following a similar deal with Blue Owl Capital Inc. for Meta Platforms Inc. in Louisiana. In that prior transaction, Pimco successfully offloaded over $1 billion in debt shortly after pricing.
