Microsoft is marketing a U.S. bond sale of at least $25 billion, its first investment-grade offering since 2017, Bloomberg reports

Microsoft is planning to raise at least $25 billion through its first U.S. investment-grade bond sale in more than nine years, Bloomberg News reported on Thursday, citing people familiar with the matter, according to Reuters, which said the sale would make Microsoft the latest tech giant to tap debt markets to fund its AI spending. The people said Microsoft is selling the debt in as many as 10 tranches with maturities ranging from two to 40 years. They said no final decision has been made on the size of the offering, which may change according to demand.

Bloomberg, as carried by Moneycontrol, said Microsoft is marketing the debt, and that initial price talk on the longest maturity, a note due in 2066, is a premium of as much as 1.35 percentage points above Treasuries. Investing.com, citing Bloomberg, reported that initial guidance ranges from 50 to 55 basis points above Treasuries for the two-year fixed-rate notes to 130 to 135 basis points for the 40-year bonds. None of those accounts reported a final size or final pricing.

Wells Fargo, JPMorgan Chase and UBS Group are managing the offering, Bloomberg reported. Reuters said Microsoft did not immediately respond to a request for comment. Bloomberg said Microsoft and the banks either declined or did not immediately respond to requests for comment.

Microsoft filed a preliminary prospectus supplement with the SEC on Thursday morning; StreetInsider’s copy is time-stamped 7:34 AM ET. It lists ten series of senior unsecured notes, two floating-rate and eight fixed-rate, with amounts, rates and maturity dates left blank. It says net proceeds will be used for general corporate purposes, which may include working capital, capital expenditures, repurchases of capital stock, acquisitions and repayment of existing debt. The filing shows total debt of $35.481 billion as of September 30.

Bloomberg said Microsoft last sold high-grade debt in 2017, when it raised $17 billion, according to Bloomberg data. It described Microsoft as one of two publicly traded U.S. companies with top-tier AAA ratings from Moody’s and S&P Global, alongside Johnson & Johnson. Bloomberg, in a Spanish-language report, said the offering is the first from a blue-chip hyperscaler since Alphabet priced $25 billion of debt on Aug. 6, and called it a crucial test of investor appetite for financing AI investments.

Microsoft reported fiscal first-quarter results on Wednesday. CNBC reported capital expenditures including finance leases of $45.2 billion. Microsoft shares were down 1.35% at $523.86 at 11:17 AM ET Thursday, according to market data on the Globe and Mail page carrying the Reuters report.

Microsoft is marketing a U.S. bond sale of at least $25 billion, its first investment-grade offering since 2017, Bloomberg reports

Sources