ING Offloads $500M Data Center Loan Portfolio, Including Stargate Project
TREE NEWS reports: ING is seeking to sell a roughly $500 million portfolio of data center loans, including financing tied to the Stargate AI infrastructure project backed by OpenAI, SoftBank, and Oracle. The sale, conducted through a bids-wanted-in-competition process with a November 19 deadline and a $10 million minimum bid per loan, comprises about 12 loans. The portfolio also includes debt from data center operators Vantage Data Centers and CyrusOne. The move comes after Democrats’ strong showing in the U.S. midterm elections, which has heightened fears of stricter tech regulation and triggered a sharp selloff in chip stocks and emerging cloud companies, wiping over $3 trillion from S&P 500 market capitalization.
Oracle’s Force Majeure Notice Raises Red Flags
A $25 million loan tied to a large data center project in New Mexico—a key component of the Stargate initiative—is drawing particular attention. Oracle has issued a force majeure notice to the developer of the New Mexico project, a legal maneuver that typically allows a party to claim unforeseeable events excuse it from contractual obligations. This signals that a core participant is reassessing the project’s feasibility, directly undermining confidence in the AI infrastructure financing ecosystem. The Stargate project, one of the largest AI infrastructure endeavors, is jointly pursued by OpenAI, SoftBank, and Oracle.
Market Implications: Financing Costs Set to Rise
The loan sale is testing the depth of a market that was once among the hottest credit assets during the AI boom. Data center loans were eagerly packaged and sold to pension funds and other yield-seeking institutions. Now, a large concentrated sale by an anonymous seller will reveal the market’s true capacity to absorb such paper amid political uncertainty and a steep equity pullback. The transmission to equities is already visible: Oracle, Nvidia, Microsoft, CoreWeave, and data center REITs Digital Realty and Equinix are under pressure, while Applied Digital, Cipher Digital, and IREN each fell more than 14% this week.
Analysts note that a core tenet of the AI trade is debt-fueled compute expansion. If loan buyers begin demanding discounts, financing costs for new data centers will climb, putting marginal projects at risk of delay or cancellation. This stress signal in the loan market represents the most tangible crack yet in the AI infrastructure financing chain.
Key Takeaways for Investors
- Credit stress is spreading: The sale of a large loan portfolio by a major bank suggests growing caution among lenders and investors about AI infrastructure debt. Watch for discounting in bids, which would signal rising risk premiums.
- Equity risk is elevated: Companies with direct exposure to AI data center buildouts—including chipmakers, cloud providers, and REITs—face downside as financing conditions tighten. The selloff in smaller data center operators is a warning.
- Political risk adds to uncertainty: The midterm election outcome has introduced regulatory uncertainty for tech, compounding financing concerns. Investors should monitor policy developments and their impact on AI capex plans.
- Stargate’s credibility at stake: Oracle’s force majeure notice raises questions about the project’s timeline and commitments. Any further signs of retrenchment could trigger broader repricing of AI-related assets.
