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Microsoft Eyes to Raise at Least $25 Billion in First US Bond Since 2017
Sentiment: NeutralHigh Priority
What Happened?
Microsoft Corp. plans to raise at least $25 billion through its first US investment-grade bond offering in nearly a decade, aiming to attract investors amid rising borrowing costs. The offering will be a test of market appetite for financing AI investments.
Key points
- Microsoft is marketing the bond in up to 10 tranches with maturities from two to 40 years.
- This is the first bond offering from a major tech company since Alphabet Inc. raised $25 billion on August 6.
- Microsoft last sold high-grade debt in 2017, raising $17 billion.
- The company holds top-tier AAA ratings from Moody's and S&P Global Ratings.
- Proceeds will be used for general corporate purposes, including capital expenditures.
- Microsoft reported a 48% gain in cloud revenue in its fiscal first quarter.
Key insights
- The bond offering may attract investors looking for diversification in a crowded market.
- Microsoft's strong credit ratings could lead to favorable borrowing terms despite rising interest rates.
- The outcome of this offering may influence future financing strategies for tech companies.
Why it matters
This bond offering could indicate strong investor interest in financing AI-related projects.
Tags
Entities
Microsoft Corp.· CompanyAlphabet Inc.· CompanyMoody's Ratings· OrganizationS&P Global Ratings· OrganizationWells Fargo & Co.· CompanyJPMorgan Chase & Co.· CompanyUBS Group AG· CompanyMeta Platforms Inc.· CompanyOracle Corp.· Company
Source
Business Standard
