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)
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.
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.