Microsoft prices a 25 billion dollar bond offering
Microsoft set the terms for 25 billion dollars of senior unsecured notes, with maturities extending from 2028 to 2066. The company expects the offering to close on November 4. Proceeds may support capital spending, working capital, acquisitions, share repurchases and debt repayments. The financing includes fixed and floating rates across multiple tranches.
Economics & Markets··Midday
A new bond financing
Microsoft priced 25 billion dollars of senior unsecured notes in an announcement dated October 29. The financing spans maturities from 2028 to 2066 and includes both fixed and floating interest rates. Cinco Días reported the launch of the same bond offering earlier that day, describing a target of approximately 25 billion dollars before the final amount was set. Microsoft’s announcement gives the completed pricing terms and says the offerings are expected to close on November 4. The announcement sets out both the overall principal offered to investors and its repayment dates. It lists separate coupon rates for the fixed-rate maturities and identifies the two floating-rate portions separately.[1], [2]
Where proceeds may go
The company listed general corporate purposes for the net proceeds. These include working capital, capital expenditure, stock repurchases, acquisitions and repayment of existing debt. It did not assign amounts to individual uses. The borrowing provides funding that may be deployed across those purposes. The named uses encompass both investment in the business and financial transactions, rather than a single announced project. The expected closing date comes after pricing; the announcement describes an offering awaiting settlement, not proceeds already spent.[1]
Maturities through 2066
Two floating-rate portions each have principal of 1 billion dollars, falling due on November 3 in 2028 and 2029. The shortest fixed-rate portion is 2 billion dollars due in 2028 with a 4.85 per cent coupon. Further fixed-rate notes comprise 3.25 billion dollars due in 2029 at 5.00 per cent and another 3.25 billion dollars due in 2031 at 5.20 per cent. The 2033 maturity totals 2.50 billion dollars and carries a 5.35 per cent coupon.[1]
Longer maturities include 4 billion dollars due in 2036 at 5.55 per cent and 2 billion dollars due in 2046 at 6.15 per cent. Another 4 billion dollars is due in 2056 at 6.25 per cent; the final 2 billion dollars matures in 2066 at 6.35 per cent. J.P. Morgan Securities, UBS Securities and Wells Fargo Securities are among the joint book-running managers. The distribution group also includes Barclays, BNP Paribas, BofA, Citigroup, Goldman Sachs, HSBC, Morgan Stanley and RBC.[1]
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