Microsoft taps US bond market for about $25 billion, its first high-grade sale since 2017

Microsoft is raising about $25 billion through its first US investment-grade bond sale since 2017, according to Bloomberg News and two people familiar with the matter who spoke to Reuters. Microsoft pointed Reuters to a regulatory filing that confirms the sale but does not disclose its size.

Structure. The offering has up to 10 tranches, eight fixed-rate and two floating-rate, with maturities from two to 40 years, the longest due in 2066, Bloomberg reported. Orders topped $100 billion, more than four times the deal size, according to a Reuters source. Wells Fargo, JPMorgan Chase and UBS are leading the sale. The senior unsecured notes carry expected ratings of Aaa/AAA and are scheduled to settle Nov. 4.

Use of proceeds. According to Microsoft's preliminary prospectus, net proceeds will go to general corporate purposes, which may include working capital, capital expenditures, share repurchases, acquisitions and debt repayment. Reports tie the sale to heavy spending on AI infrastructure.

Context. Microsoft last sold US high-grade bonds in 2017, when it raised $17 billion, according to Bloomberg. The sale comes a day after CFO Amy Hood said the company would pursue additional funding sources "when we believe it is attractive to do so," Reuters reported.