upvote
Why aren't the PE firms buying this debt right now though, before Oracle is downgraded? Isn't that a better purchase?

(Sincere, not rhetorical questions)

reply
Because assuming the premise is true, there will be a dip in bond prices (ie. higher yields) when oracle gets downgraded, because pension funds or whatever have to dump their holdings. You buy the dip, not at the top.
reply
Because the general consensus at this point appears to be that the notes will fail. You wouldn’t buy a loan if you thought it wasn’t going to be repaid.
reply
> You wouldn’t buy a loan if you thought it wasn’t going to be repaid.

Eh, people do weird things all the time.

Also, there is often extreme information asymmetry.

reply
Ehhhh?

I guess, maybe, but perhaps the risk that GP is commenting on is that it could be it's own form of Juicing.

I do sincerely doubt, even with the big shifts that AI enables to have companies 'move away' from Oracle, that Oracle will default.

On the other hand, There's still an elevated chance of decline.

IOW, Those stocks might move from pension type plans to different baskets as a result, however there is a non-negligible risk of some (not total!) loss in the 5-10 year term.

Will add, I would -hope- that the same pension rules around selling questionable stocks, would also have rules limiting what level of exploitation is possible.

reply