Microsoft targets at least US$25 billion through US bond offering
Bloomberg reported that the deal would end a gap in high-grade US borrowing dating to 2017, as Microsoft expands spending on AI infrastructure.
Microsoft is pursuing a US bond sale to raise at least US$25 billion, according to Bloomberg, which cited people familiar with the transaction. The amount ultimately borrowed will hinge on demand from investors.
Wells Fargo, JPMorgan Chase and UBS are overseeing the offering. Bloomberg reported that the borrowing could comprise as many as 10 tranches, carrying repayment periods of two to 40 years.
The financing effort comes as Microsoft spends more on infrastructure for artificial intelligence. The company disclosed US$45.2 billion in data center and equipment expenditure, with leases included, for the three months to September. Its free cash flow dropped to US$18.6 billion, a decline of 27%.
Revenue from Azure increased 48%, reaching US$33.2 billion for the quarter. Microsoft projects growth between 49% and 50% in the current quarter. Chief financial officer Amy Hood told analysts that the company still lacked enough capacity to meet demand.
Microsoft last made a major US bond offering in January 2017, raising US$17 billion and directing some proceeds toward its LinkedIn purchase. It shares the highest available credit rating, AAA, with Johnson & Johnson; no other US companies hold that rating.
