Microsoft to issue corporate bonds to raise over $1 billion

by geekzhang on 2013-05-03 14:05:04

Microsoft plans to sell corporate bonds in the U.S. and eurozone markets this Thursday, aiming to raise over $1 billion.Bond underwriters indicate that the issuance volume in the U.S. will be at least $500 million. This marks the fifth time the software giant is issuing such bonds. In 2009, Microsoft issued its first corporate bond. The yield on Microsoft's five-year bonds is 0.35 to 0.40 percentage points higher than comparable government bonds. For the 10-year bonds, it is 0.70 to 0.75 percentage points higher, and for the 30-year bonds, it is 0.90 to 0.95 percentage points higher. Microsoft also plans to issue bonds in the euro market, raising 550 million euros.Apple Inc. is also preparing for its own bond sale. Investors believe that demand for Apple bonds will be strong as buyers are eager to exit other securities trades, given that even high-quality securities now offer unsatisfactory returns. Apple currently has an AA+ rating, while Microsoft holds a AAA rating.Earlier this month, Microsoft announced its quarterly financial results ending March 31, 2013. Profits increased by 19% year-over-year to $6.06 billion, with revenue reaching $18.8 billion, up 8.2% from last year's $17.4 billion, exceeding some analysts' expectations. Last November, Microsoft raised $2.25 billion through a bond issuance in the U.S. market.