Microsoft is Transforming the Bond Market as Well as Its Business

Just as Satya Nadella is making Microsoft Corp. more relevant in a world that prioritizes cloud computing and mobile technology, so too is the company breaking new ground in the bond market.

Microsoft sold $19.75 billion of bonds on Monday in its largest-ever debt issue. The notes, which were sold to raise cash for its planned purchase of LinkedIn Corp., were graded AAA — the highest possible credit rating — by S&P Global Ratings and Moody’s Investors Service.

With that one deal Microsoft has taken sales of top-rated non-government debt to their highest in seven years, even though it's still only August. That's a surprising outcome given the global pile of AAA-rated government paper has been in decline since the financial crisis thanks largely to a drop in issuance by sovereigns. (Governments tend to have higher ratings than companies because they issue their own currency, can raise taxes, and own a printing press).