Microsoft Taps Bond Market for at Least $25 Billion, Its First High-Grade Sale in Over Nine Years, to Fund AI Build-Out

Microsoft is raising at least $25 billion through a US investment-grade bond sale, its first high-grade debt offering in more than nine years, as the company steps up spending on artificial intelligence infrastructure. The deal was among the most-searched business topics in India on Monday.

Deal details

• Structure: up to 10 tranches maturing in two to 40 years, eight fixed-rate and two floating-rate
• Pricing guidance: the longest notes, due 2066, guided at up to 1.35 percentage points over US Treasuries; two-year fixed notes at 50–55 basis points over Treasuries
• Ratings: expected Aaa/AAA. Microsoft is one of only two US-listed companies rated AAA by both Moody’s and S&P Global
• Settlement: expected on 4 November 2026, with JPMorgan Chase, UBS and Wells Fargo managing the sale
• Use of funds: general corporate purposes, including working capital, capital spending, share buybacks, acquisitions and repaying existing debt

The AI spending race

Microsoft last tapped the high-grade bond market in 2017, when it raised $17 billion across seven tranches. Since then, its capital spending has surged. The company is targeting about $170 billion in capital expenditure for 2026; first-quarter capex, including finance leases, was $45.2 billion, and it expects more than $50 billion in the fiscal second quarter. In the latest quarter, about 68% of its operating cash flow went into capex.

Other tech giants are borrowing too. Amazon, Alphabet and CoreWeave have turned to the bond market to fund data centres, and Oracle plans to raise $10 billion in new debt. Alphabet’s capex in its latest quarter exceeded its operating cash flow.

Featured image: Building 92 on Microsoft’s Redmond campus (file photo). Photo: Coolcaesar, CC BY-SA 4.0 (source).

Sources

• Microsoft Launches $25 Billion Bond Sale To Fund AI Expansion – Dataconomy