Microsoft Announces Debt Offering

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Microsoft Corp. today announced the pricing of its offering of $2.25 billion of senior unsecured notes. The notes consist of the following tranches:

  • $600 million of 0.875% notes due Nov. 15, 2017
  • $750 million of 2.125% notes due Nov. 15, 2022
  • $900 million of 3.500% notes due Nov. 15, 2042

Microsoft intends to use the net proceeds from the offering for general corporate purposes, which may include funding for working capital, capital expenditures, repurchases of stock, acquisitions and repayment of existing debt. The offering is expected to close on Nov. 7, 2012.
 
I wish I could borrow 600 million at less than 1%

They are basically playing the probability that interest rates will rise
and they'll basically profit off the interest and the cash infusion
too.
 
heatlesssun said:
With interest rates where they are it's a smart time to borrow and there's probably some tax or accounting advantage that Microsoft has figured out as well.
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Yeah, definately something for accounting/tax purposes.

But beyond that, am I the only one amused that a tech related company would offer a 30 year note? Okay maybe not that they would offer one, but that anyone would be interested in one, especially at only 3.5% and it's unsecured? :rolleyes:

Gee, what could possibly go wrong? lol!
 
JayteeBates said:
Dam MS needs money so bad it is offering bonds?
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When you can borrow money at a lower rate than inflation (which is 2.5%, on average, in the US), you would be stupid to not borrow as much as the market will allow. People are basically paying you to hold their money. MSFT could stick the cash into a bank account and collect more in interest than they pay out.
 
STR said:
When you can borrow money at a lower rate than inflation (which is 2.5%, on average, in the US), you would be stupid to not borrow as much as the market will allow. People are basically paying you to hold their money. MSFT could stick the cash into a bank account and collect more in interest than they pay out.
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Na they'd never put it in a back they will only return fractions. They are going to invest in Apple stock and Profit.
 
At this point looks like MSFT has a better credit rating than many countries now...

I'm curious how many other companies sitting on giant stockpiles of money are going to use the below-inflation-interest-rate loophole...
 
Yakk said:
At this point looks like MSFT has a better credit rating than many countries now...

I'm curious how many other companies sitting on giant stockpiles of money are going to use the below-inflation-interest-rate loophole...
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I doubt many. Apple, Google, many oil companies, that would cover it for the big guys but I am sure there are many successful companies I haven't heard of.
 
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