Microsoft Prices $25 Billion Bond Sale to Fund AI, Its First Since 2017

Microsoft has priced a $25 billion bond sale, its first US investment-grade offering since 2017, three days after offering voluntary exit packages to about 60,000 employees. The company said the proceeds will fund AI expansion, according to the Times of India.

$100 Billion in Bids

Orders for the deal exceeded $100 billion, more than four times the amount on offer, Reuters and NewsBytes reported, citing sources. Lenders were invited to bid on a 10-part debt sale, with the software giant drawing more than quadruple demand, Business Standard said. The Wall Street Journal reported the company moved to issue at least $25 billion in new bonds, finally joining peers in using debt to fund its AI buildout. The Microsoft 25 billion bond sale was formally announced by the company itself in a same-day press release, Microsoft Source reported.

Why Borrow After the Buyouts

The debt comes just days after Microsoft offered voluntary buyouts to roughly 60,000 staff, about half its global workforce, the Times of India reported. The bond pricing followed the exit offers by three days. Microsoft did not say whether the two moves were linked, but the timing drew attention from markets. CFO Amy Hood said in a statement quoted by the Times of India: “We’re fortunate to have…” — the excerpt cut off there. The company said the offering would be sold through a syndicate of banks, though Bloomberg reported the exact list of underwriters had not been disclosed publicly. Microsoft last sold US investment-grade bonds in 2017, meaning this is its first such raise in more than nine years, reports said. The 24/7 Wall St. noted the irony of one of the most cash-rich companies on earth lining up $25 billion in new debt after nearly a decade away from the bond market. Mint on MSN asked the same question analysts had: why turn to debt despite holding a large cash pile? None of the reports gave an answer beyond the stated goal of funding AI infrastructure. The offering is Microsoft’s largest non-convertible bond sale in over a decade, though no prior comparison figure was provided in the summaries. Terms of the tranches — including maturities and coupons — were not disclosed in the reports. What happens next: Microsoft is expected to settle the sale in the coming days, with final allocation details typically released after pricing. No date has been named in the reports so far.