updated 04:12 pm EDT, Thu April 25, 2013
Move similar to Apple's recently announced plan to access debt market
Microsoft has commenced selling debt in the US and European markets. According to the Wall Street Journal, the initial offering is a minimum of $500 million. The move is the software developer's fifth offering since 2009, and the company should be able to get the lowest yields of the year for a five-year corporate debt offering.
Initial estimates show the bonds boasting a five-year maturing yielding 0.35 to 0.40 percentage point more than similar Treasury bonds. Ten-year bonds offer 1.05 to 1.15 percentage points, with 30-year bonds sporting 1.25 to 1.30 percentage points. European bond offerings are being offered, with Microsoft looking for $715 million in bonds.
The move is similar to what Apple announced in its last set of quarterly earnings, with expected demand for both companies bonds strong. Apple's credit rating is AA+, with Microsoft coming in slightly higher at AAA. Corporate bond offerings are seen as a way for both companies to bridge the current low-yield markets and stave off some financial uncertainties for future quarters, at least until the economic climate improves.