Microsoft sells $25 billion of bonds in first US bond sale since 2017

Microsoft has sold $25 billion of bonds in its first US investment-grade bond sale in more than nine years, as the technology giant turns to borrowed money to fund its vast AI spending. The deal was priced on Thursday, 29 October, and its final terms were filed with US regulators on Friday, 30 October.

The sale drew more than $100 billion of orders from investors, according to Reuters — more than four times the amount on offer. The debt was sold in 10 parts, with maturities of between two and 40 years. The shortest fixed-rate notes, due in 2028, pay 4.85%, while the longest, due in 2066, pay 6.35%.

JPMorgan, Wells Fargo and UBS managed the offering. Microsoft’s last US bond sale raised $17 billion in January 2017, partly to help pay for its purchase of LinkedIn.

The filing does not tie the money to a single purpose: the proceeds can be used for general corporate purposes, including working capital, capital spending, share buybacks, acquisitions and repaying existing debt. Even so, the timing points to AI: finance chief Amy Hood told investors the company would spend more than $50 billion on capital projects, including finance leases, this quarter alone.

Why it matters

Microsoft is one of only two US companies with a AAA credit rating, alongside Johnson & Johnson. It held $64.5 billion in cash and short-term investments at the end of September, down from $76.8 billion three months earlier. It still generates more cash than it spends on property and equipment: $58 billion of operating cash against $39.4 billion of such spending in the July-to-September quarter.

The bond sale is a choice, not a rescue — cheap borrowing while investors are still eager to lend. Rivals have borrowed far more: Alphabet has sold about $106 billion over the past 12 months and Amazon about $113 billion, according to AIStockWire’s tracker. Microsoft expects to keep generating positive free cash flow in the year to June 2027, unlike its biggest rivals.

What happens next

Investors will watch whether Microsoft’s spending keeps climbing in 2027, as Hood has signalled, and whether rivals follow suit. If borrowing costs rise, or AI revenue grows more slowly than expected, the industry’s debt-funded buildout will come under closer scrutiny.

This article is for general information and education only. It is not legal or financial advice.

Sources

• https://ktwb.com/2026/10/29/microsoft-expects-to-raise-25-billion-in-us-bond-sale-source-says/ (Reuters, 29 October 2026)
• https://aistockwire.com/blog/microsoft-msft-25-billion-bond-sale-first-since-2017-october-2026 (AIStockWire, 30 October 2026)
• https://en.sedaily.com/international/2026/10/30/microsoft-taps-bond-market-first-time-in-9-years-raising-25 (Seoul Economic Daily, 30 October 2026)