Banks seek out new buyers for Oracle data centre loans
ft.com
ft.com
One paragraph there says the banks need to sell them so they can invest in other things... Do I smell the banks realizing "oh shit, we're holding a bomb, we need to convince some other fool to take it before it blows up...".
The real reason they will be doing this is this is what they do in general. They don’t hold on to huge amounts of risk with predictable returns (because it consumes their operating and regulatory risk capital inefficiently) they will instead find buyers for that risk, which frees up capital they can then use on their next thing. That basically gives up some of the long term, low return, low volatility risk for shorter term, higher return, higher volatility risk.
It is eerily similar to the mortgage crisis in 2007-2008. Low grade mortgage bonds were given AAA rating and there were too many of these which then caused the crisis.
[0] the article mentions how more Date Center recent bonds required a higher interest rate. This implies the risk increased (during the same time Feds lowered the rate), hence the prospects for Data Center bonds diminished.
Investment banks make investment products for investors. They do keep risk for themselves so you will find when they sell these loans they will often keep a slice, but they only need so much Oracle datacenter loan risk - they want to have free capital to find other opportunities to fund.
Hence the shop sells the inventory as fast as they can, while banks hold safe loans as long as they can unless they believe that aren't safe anymore or that they can make more money with something else.
I'm not speaking theoretically here - I have been forced to sell loans for capital reasons because they were too expensive to fund even though they were all current, 100% money good and massively overcollateralized.