Microsoft Raises $3.75 Billion By Selling Bonds To Investors

Posted May 14, 2009

Earlier this week, Microsoft Corporation has sold $3.75 billion worth of bonds to their investors.  The sale gave investors a small amount of extra yield over Treasury bonds.  Microsoft has a credit rating of AAA.  This was the first time that the company ever offered a long-term bond offering.

Why did Microsoft want to raise all of this extra cash?  Perhaps they want to look into more acquisitions.  Microsoft said that they wanted to take advantage of good market conditions and their great credit rating.  On September 22, 2008 Microsoft’s board of directors authorized an offering of up to $6 billion in debt.

“Someone probably told them there is no AAA paper out there, and there’s demand for the name for diversification,” stated bond trader and co-head of structured products/emerging markets at MF Global Andrew Brenner. “It’s pretty good for long-term money.”

AAA-rated corporate debt yields are about 211 basis points about the Treasurys.  JP Morgan and Morgan Stanley took the lead of the bond sale.

[via MarketWatch]