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 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.

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.