May 12 (Bloomberg) -- Microsoft Corp., the world’s largest software maker, sold $3.75 billion of debt in its first bond offering, adding to its coffers for acquisitions, capital expenses and share buybacks.

The sale yesterday was divided among $2 billion of 2.95 percent, 5-year notes; $1 billion of 4.2 percent, 10-year debt; and $750 million of 5.2 percent, 30-year bonds, Redmond, Washington-based Microsoft said in a statement.

Microsoft is taking advantage of its top credit rating to help fund a $40 billion share repurchase program, as well as build data centers to help narrow the gap with Internet search leader Google Inc. Microsoft has also said it wants to amass cash as a weak economy provides opportunities to acquire small and midsize companies.

“They can borrow very reasonably and they’re not sure how much longer they can borrow at these rates,” said Brendan Barnicle, an analyst at Pacific Crest Securities in Portland, Oregon. The amount raised in the debt sales wouldn’t allow Microsoft to pursue large acquisitions, he said.

Shareholders shouldn’t expect much acquisition activity for the rest of the company’s fiscal year ending June 30, Chief Financial Officer Chris Liddell said in January. After that, the company has a very good opportunity to buy smaller companies, he said. “That’s part of the thinking about why we’re trying to retain our capital.”

Microsoft’s 5-year notes pay a yield of 0.95 percentage point more than similar-maturity U.S. Treasuries, and both the 10- and 30-year bonds priced at a spread of 1.05 percentage point, according to Bloomberg data.

‘Pristine’ Company

“It’s a once in a lifetime opportunity to get exposure to one of the most pristine corporations in the world,” said Tom Lewis, head of Morgan Stanley’s investment-grade syndicate in New York. “That’s why the company was able to achieve the aggressive pricing they got.”

The company was the first in a decade to receive the top AAA rating from Standard & Poor’s when it initially filed to tap debt markets in September. Moody’s Investors Service also assigned its highest rating to Microsoft’s debt.

Microsoft shares, down 34 percent in the past year, gained 57 cents to $19.89 in Nasdaq Stock Market trading at 4 p.m. New York time. The company is acting now to seize on a credit-market rally.

The company offered bonds on the busiest day for corporate debt sales since June 16, 2008, joining 12 other borrowers. Investment-grade companies have sold $498.9 billion of U.S. corporate bonds this year, 25 percent more than in the same period of 2007, when the debt sold at a record pace, according to data compiled by Bloomberg.

‘Able to Access’

Yields on investment-grade debt relative to benchmark rates were unchanged yesterday at 444 basis points, the lowest since Sept. 25, according to Merrill Lynch & Co.’s U.S. Corporate Master index. The average yield on AAA rated debt rose 2 basis points to 213 basis points, down from 607 basis points on March 9, a 2009 high, according to Merrill Lynch data. A basis point is 0.01 percentage point.

The Microsoft offering shows “companies are able to access the capital markets here, and that’s good news,” John Calamos, chief executive officer of Calamos Asset Management Inc. in Naperville, Illinois, said yesterday in a Bloomberg Television interview. “The credit markets are alive and well.”

Microsoft has cut about 5,000 jobs since January to reduce expenses as the recession cools demand for software. The company had $25.3 billion in cash and short-term investments as of March 31, according to regulatory filings.

Microsoft reported its first decline in sales last quarter as customers opted for cheap laptop computers with older versions of its Windows operating system and the recession hurt the Internet advertising market.

The company initially floated the idea of selling bonds in February 2008, when it was trying to take over Yahoo! Inc. for $44.6 billion. Yahoo rejected the offer, even after the price climbed as high as $47.5 billion.

To contact the reporters on this story: Gabrielle Coppola in New York at gcoppola@bloomberg.net; Dina Bass in Seattle at dbass2@bloomberg.net

Last Updated: May 12, 2009 16:09 EDT