Microsoft Raises $8 Billion In Euros & Dollars With Bond Offering

Microsoft sold $8 billion of bonds in dollars and euros, a record offering from the world’s largest software maker that followed Johnson & Johnson by issuing AAA rated corporate securities this week.

Microsoft borrowed $3.25 billion with five-, 10- and 30-year notes in the U.S. currency, according to data compiled by Bloomberg. The Redmond software giant also issued 3.5 billion euros ($4.8 billion) of bonds split between eight- and 15-year portions.

Top-ranked borrowers are seeking to raise cash from the bond market even as investors favor the higher yields of lower-rated debt amid speculation the Federal Reserve will soon taper stimulus measures that pushed interest rates to record lows. The Bank of America Merrill Lynch AAA U.S. Corporate Index has lost 4.2 percent this year, compared with a 6.9 percent gain for dollar-denominated speculative-grade securities.

Proceeds will fund general corporate purposes, Microsoft said in regulatory filings today. The euro sale is more than six times the size of its only previous issue in the currency of 550 million euros in 20-year notes that won a record-low 2.625 percent coupon for similar-maturity nonfinancial corporate bonds on April 25, Bloomberg data show. That sale coincided with almost $2 billion of dollar debt issued in three parts.

Ballmer’s golden parachute isn’t going to pay itself (just kidding).  Don’t over-analyze why Microsoft raised this money, to some extent this is standard operating procedure for companies this size.

Source: Bloomberg

  • Nham Thien Duong


  • Habib Wakil

    Sounds like it will offset the Nokia purchase to me!

    • nohone

      MS buying Nokia was just approved (about the same time you wrote your comment) by the EU, and this bond sale will cover the price.
      However, a bond sale is nothing that is new. There are some people on the internet claiming that this means that MS is collapsing and they need money to survive. Ignoring the billions MS has, Apple filed for a $17B bond sale back in April but nobody seems to think that more than 2X a bond sale means Apple is failing.

      • Tips_y

        Good point on MSFT bond sale vis-à-vis the Apple bond sale.

  • Zdenko

    Money is cheap right now, cheaper the repatriation and paying taxes on it. So it is smart to borrow take the expensive off future earnings. Finance 101