Microsoft raised nearly $3 billion through sales of bonds

Computer store news: Microsoft issued nearly $3 billion in bonds on the European and American bond markets on Thursday, rushing to finance the company with a loan cost that fell to a record low before the rival Apple issued bonds.

Data provided by data provider Dealogic shows that Microsoft issued $1.95 billion in bonds in the US market, the fifth time the company has issued bonds in the US since the 2009 bond issue. At the same time, Microsoft also issued bonds for the first time in the euro zone market, seeking to issue 20-year euro bonds, raising funds of 550 million euros (about 715 million US dollars).

Microsoft spokesperson Pete Wootton said in a statement, "This will allow more European investors to participate in the issuance of AAA bonds." The 20-year bond issuance price and interest rate issued by the company in Europe is very attractive. On the whole, issuing bonds in the European market helps to lower the overall cost of capital, which is similar to our approach in the US market. ”

For Microsoft, issuing bonds in the US market is also a good deal: According to S&P Capital IQ, Microsoft issued five-year corporate bonds at the lowest coupon rate. In November last year, Microsoft issued a five-year corporate bond with an annual interest rate of 0.993%. This interest rate is the lowest interest rate for similar bonds. The five-year bond rate issued by Microsoft on Thursday was 0.32 percentage points higher than the US Treasury bond rate, and the coupon rate was about 1.01%. The 10-year bond rate is 0.70 percentage points higher than the US government bond rate, and the 30-year bond rate is 0.90 percentage points higher than the US government bond rate.

Principal Global Investors Limited (Principal Global Investors, LLC.), a credit analyst Leone & middot; Berg (Leon Burger) said that after the dividend and stock buyback, Microsoft may issue bonds by means of a Ample cash in the United States. In addition, Microsoft may use the newly raised funds to pay off some of the bonds that are due this year. Microsoft will have $2.25 billion in bonds due this year.

Berg stressed that it is good for Microsoft to issue bonds before Apple, because Apple's bond issue may force Microsoft to raise the coupon rate of bonds. Market research firm CreditSights expects Apple to issue $55 billion in corporate bonds for stock repurchases and dividends in the next few years. Both Microsoft and Apple’s bonds have received high ratings from rating agencies: Microsoft’s current rating is AAA and Apple’s rating is AA.

Bond investors say they are interested in participating in the issuance of Apple bonds, although bonds with higher ratings usually have higher coupon yields. This sentiment certainly helped Microsoft's bond issuance on Thursday. Berg said, “Overall, the market is very optimistic about the prospects of Microsoft's five-year or ten-year bonds. ”

Microsoft’s earnings report released this month showed that in the third quarter ended March 31, the company’s net profit was $6.06 billion, up 19% year-on-year; revenue was $18.8 billion. It rose 8.2% in the same period last year, exceeding market analysts' expectations. The revenue of Microsoft's video game and server software business helped offset the impact of the PC market downturn on company performance.

According to data provided by Dealogic, Microsoft issued $2.25 billion in bonds in the US market last November. In 2010, Microsoft was the largest bond issuer in the US bond market, which issued $4.75 billion in corporate bonds.