Microsoft raises about $25 billion in its first US investment-grade bond sale in more than nine years

MSFT is raising about $25 billion through its first US investment-grade bond sale in more than nine years, two people familiar with the matter told Reuters on Thursday. Bloomberg News, which reported it first, put the size at a minimum of $25 billion. Microsoft pointed Reuters to a regulatory filing that confirms the bond sale without disclosing its size, and Barron's headlined the offering as Microsoft issuing $25 billion in new bonds.

The sale makes Microsoft the latest tech giant to tap debt markets to fund its AI ambitions, Reuters said. Its last large bond deal was in 2017, when it raised $17 billion. It is the first blue-chip hyperscaler sale since Alphabet priced $25 billion of bonds on Aug. 6, per Bloomberg data relayed by briefs.co. Unlike Alphabet, which burned $9.07 billion of cash in the third quarter, Microsoft expects positive free cash flow in its fiscal year through June 2027, Reuters reported.

The debt came in as many as 10 tranches with maturities of 2 to 40 years, managed by Wells Fargo, JPMorgan Chase and UBS Group. Orders exceeded $100 billion per Reuters, and Bloomberg-derived reports cite a peak of $115 billion, or 4.6 times the deal size. Early talk on the 2066 note was as much as 1.35 percentage points over Treasuries, and it priced at 1.05, per secondary outlets relaying Bloomberg. Seoul Economic Daily said proceeds will go to general corporate purposes, including capital expenditures.

The sale came a day after CFO Amy Hood told investors Microsoft would pursue additional funding "when we believe it is attractive to do so", citing the need to preserve cash flow and financial flexibility. Microsoft is one of only two publicly traded US companies rated AAA by both Moody's and S&P, and its five-year credit default swaps traded near 54 basis points, against about 116 for Meta and 275 for Oracle, per ICE data cited by briefs.co.

The share reaction was modest and mixed through the day: up 1.65% premarket per Benzinga, then down 0.7% in afternoon trading per Reuters, or about 1.2% in an updated copy. Watch for the final size and tranche terms in Microsoft's filing.