The tech company sold the bonds in as many as four parts, a person familiar with the matter told the news outlet. The Cerner deal was financed with roughly $15.7 billion in bridge loan debt, which was later reduced when Oracle borrowed about $4.4 billion through a term-loan agreement.
Fitch subsequently lowered Oracle’s long-term issuer default rate and unsecured debt from BBB+ to BBB. The company’s rating outlook is negative, according to Fitch.
“Today’s Oracle deal has been anticipated for months, and we expect healthy participation from the buyside even though it’s a company that has been remarkably inattentive to maintaining its credit rating profile,” Baylor Lancaster-Samuel, vice president of fixed income at Amerant Investments, emailed Bloomberg. “As recently as 2020, Oracle was rated high A and with the Cerner deal, there was some threat that Oracle could flirt with a BBB- rating at the lowest rung of investment grade.”
Three credit rating agencies warned in December that they planned to possibly downgrade the company’s investment-grade ratings if it used debt to finance its $28.4 billion takeover of Cerner.
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