Morgan Stanley: Oracle's 5-year CDS rises to 260bps, chip leasing SPVs expected to become the new vehicle for AI financing.

On Oct. 10, according to Chaoxiang Research, a research note dated Oct. 7, 2026, by Morgan Stanley highlighted that Oracle’s 10-year USD bond yield hit 7.5%, and its 5-year credit default swaps (CDS) surged from 57 basis points to 260 basis points. According to The Wall Street Journal, Oracle may be procuring chips through a third-party entity and entering into a leaseback agreement. The scale is undisclosed, with the loan-to-cost ratio exceeding 50%. Morgan Stanley noted that this structure closely aligns with its long-term hypothesis of an SPV framework for chip leasing, under which credit is recorded as debt on the balance sheet and factored into the parent company's adjusted leverage assessment.

Morgan Stanley assessed that the bond market's reaction was primarily driven by investors' capacity to absorb the broader wave of chip financing, with Oracle's individual supply deal playing a secondary role. From a trading perspective, the bank recommends buying Oracle's 5-year CDS and selling its 2035 and 2055 maturity bonds, positioning for deteriorating credit conditions.