Microsoft issues bonds for the first time ever

In a sign that Microsoft has survived the volatile jungle known as the technology industry, Microsoft announced today that it is issuing bonds for the first time ever:

Microsoft Corp. priced a $3.75 billion debt offering on Monday, a first for the world's largest software maker.

Microsoft said in a Securities and Exchange Commission filing that it is offering five, 10 and 30-year senior unsecured notes. In a press release, the company said it will sell $2 billion of 2.95 percent notes due June 1, 2014; $1 billion of 4.20 percent notes due June 1, 2019 and $750 million of 5.20 percent notes due June 1, 2039.

It's rated AAA by S&P and it really doesn't need the money per se. It is sitting on $24 billion in cash so this bond offering is to alter the capital structure and boost leverage. Microsoft started paying dividends a few years ago and it has been remaking itself from a high growth company to a low growth, stable, operation.


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