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Microsoft's first US bond sale since 2017: $25 billion-plus, against $17 billion then

Microsoft's first US bond sale since 2017: $25 billion-plus, against $17 billion then — Newsmesis editorial illustration
— Newsmesis illustration

What happened

Microsoft is seeking to raise at least $25 billion in a US investment-grade bond sale, its first since January 2017, when it raised $17 billion. Bloomberg reported, citing people familiar with the matter, that the deal is split into as many as 10 tranches maturing in two to 40 years, with Wells Fargo, JPMorgan Chase and UBS managing it. The sale came a day after Microsoft disclosed $45.2 billion of quarterly spending on data centers and equipment, while free cash flow fell 27%.

What we know

The Next Webthenextweb.comBloombergbloomberg.comThe Informationtheinformation.comTechmemebloomberg.com
  • Microsoft is looking to raise at least $25 billion, with the final size depending on investor demand, per Bloomberg as relayed by The Next Web.
  • The offering has up to 10 tranches with maturities from two to 40 years, and Wells Fargo, JPMorgan Chase and UBS are managing it, per The Next Web citing Bloomberg.
  • Its last major US bond sale was in January 2017 and raised $17 billion, partly to fund the LinkedIn acquisition, per The Next Web.
  • In the quarter to September, spending on data centers and equipment, including leases, reached $45.2 billion and free cash flow fell 27% to $18.6 billion, per The Next Web.
  • Azure revenue rose 48% to $33.2 billion in the quarter, and chief financial officer Amy Hood told analysts demand still exceeds supply, per The Next Web.

What we don't know yet

  • The final size, pricing and tranche breakdown of the sale have not been reported.
  • Microsoft has not publicly confirmed the offering in the sources reviewed; the details rest on anonymous sources cited by Bloomberg.
  • Whether Microsoft will borrow regularly, as Alphabet said it would, is unknown.

Why it matters

One of only two US companies with a AAA credit rating is now borrowing to fund AI data centers. Bond investors will have to absorb more supply from Big Tech issuers, whose combined debt has roughly doubled in five years to about $350 billion, per Bloomberg data cited by The Next Web.

Claims

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Why you can trust this story

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Source map · 4 outlets / 4 articles

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Checked claims were verified against the cited source text. Weights are fixed and explainable.

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  • 3 independent origins / 4 sources
  • Drafted by an automated system; a human editor approves every story before it is published.

Verification ledger · 6

  • Claim: Microsoft is seeking to raise at least $25 billion in a US investment-grade bond sale.
    Status: UnconfirmedVerification trailUnverifiedChecked by verification engine

    No automated check against the source text is available.

  • Claim: The sale is Microsoft's first US high-grade bond offering since 2017.
    Status: UnconfirmedVerification trailUnverifiedChecked by verification engine

    No automated check against the source text is available.

  • Claim: Microsoft's January 2017 US bond sale raised $17 billion.
    Status: ConfirmedVerification trailVerifiedChecked by verification engine

    At least one checkable detail was matched against the full text of the cited source.

  • Claim: Microsoft's spending on data centers and equipment, including leases, reached $45.2 billion in the three months to September.
    Status: ConfirmedVerification trailVerifiedChecked by verification engine

    At least one checkable detail was matched against the full text of the cited source.

  • Claim: Microsoft's free cash flow fell 27% to $18.6 billion in the same quarter.
    Status: ConfirmedVerification trailVerifiedChecked by verification engine

    At least one checkable detail was matched against the full text of the cited source.

  • Claim: Azure revenue rose 48% to $33.2 billion in the quarter.
    Status: ConfirmedVerification trailVerifiedChecked by verification engine

    At least one checkable detail was matched against the full text of the cited source.

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