Microsoft Corp. (MSFT) sold $8 billion of bonds in dollars and euros, a record offering from the world’s largest software maker that followed Johnson & Johnson by issuing AAA rated corporate securities this week.
Microsoft borrowed $3.25 billion with five-, 10- and 30-year notes in the U.S. currency, according to data compiled by Bloomberg. The Redmond, Washington-based company also issued 3.5 billion euros ($4.8 billion) of bonds split between eight- and 15-year portions.
Top-ranked borrowers are seeking to raise cash from the bond market even as investors favor the higher yields of lower-rated debt amid speculation the Federal Reserve will soon taper stimulus measures that pushed interest rates to record lows. The Bank of America Merrill Lynch AAA U.S. Corporate Index has lost 4.2 percent this year, compared with a 6.9 percent gain for dollar-denominated speculative-grade securities.
Proceeds will fund general corporate purposes, Microsoft said in regulatory filings today. The euro sale is more than six times the size of its only previous issue in the currency of 550 million euros in 20-year notes that won a record-low 2.625 percent coupon for similar-maturity nonfinancial corporate bonds on April 25, Bloomberg data show. That sale coincided with almost $2 billion of dollar debt issued in three parts.
Today’s dollar offering included $1.25 billion of 1.625 percent, five-year debt that yields 35 basis points more than similar-maturity Treasuries, $1.5 billion of 3.625 percent, 10-year bonds that pay 90 basis points more than benchmarks and a $500 million portion of 4.875 percent, 30-year securities that yield an extra 105, Bloomberg data show.
The issue came a day after J&J, one of four U.S. nonfinancial borrowers with a top credit ranking, sold $3.5 billion of bonds in its first offering since 2011. Microsoft and J&J, along with Exxon Mobil Corp. and Automatic Data Processing Inc., have the highest ratings from Moody’s Investors Service and Standard & Poor’s.
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