Microsoft to raise $25B through bond sale
What's the story
Microsoft has announced plans to raise $25 billion through a bond sale. The tech giant detailed the terms of the offering in a prospectus supplement filed with the US Securities and Exchange Commission (SEC) on November 2. The company priced the bond offering on October 29, with the transaction expected to close on November 4.
Bond details
Breakdown of Microsoft's bond offering
Microsoft's bond offering is a way for the company to borrow $25 billion from investors by issuing bonds.
These bonds have maturities ranging from 2028 to 2066, giving Microsoft a long-term borrowing horizon of up to 40 years.
The company plans to raise $6 billion through floating-rate bonds and $19 billion through fixed-rate ones.
Fund allocation
Use of proceeds from the bond sale
The net proceeds from the bond offering will be used for general corporate purposes. This could include funding working capital, capital expenditures, share repurchases, acquisitions, and repayment of existing debt.
Although Microsoft hasn't specifically allocated any portion of the $25 billion for AI investments or data center expansion, it has said that these areas are key investment priorities.
Debt impact
Impact on Microsoft's debt levels
The bond sale could potentially increase Microsoft's debt by over 70% or $24.87 billion.
The company's capital structure as of September 30, 2026, and how it would look after the proposed $25 billion bond sale has been disclosed in the regulatory filing.
However, this calculation includes the new debt but does not account for how Microsoft will spend the money raised from this transaction.