The Microsoft bond sale seeks at least $25 billion from debt investors in the company’s first United States investment grade offering in more than nine years. Microsoft launched the sale on October 29, 2026, as it funds a large expansion of data centers and computing capacity for artificial intelligence services. The Microsoft bond sale drew more than $100 billion in orders, more than four times its expected size, according to two sources familiar with the matter who spoke to Reuters on October 29. Morningstar, citing Bloomberg News, reported orders of $115 billion. The final size has not been set and could change with investor demand.
Before this Microsoft bond sale, Microsoft last entered the United States investment grade bond market in 2017, when it raised $17 billion. It is one of only two United States listed companies to hold the highest AAA credit rating from both Moody’s and S&P Global Ratings, with Johnson and Johnson the other, according to market coverage of the sale. That rating helps explain the depth of demand, even as investors have grown more selective about debt sold to fund artificial intelligence projects. The 10 year Treasury yield has hit a 24 year high in recent weeks, Morningstar reported, adding pressure to credit markets.
Microsoft bond sale structure
The offering is being sold in as many as 10 tranches, with maturities ranging from two to 40 years, Bloomberg News reported. Wells Fargo, JPMorgan Chase and UBS Group are managing the sale. Microsoft priced a $25 billion offering on October 29, with closing expected on November 4, according to a later pricing report. That report listed two floating rate portions of $1 billion each, due November 3, 2028, and November 3, 2029, plus eight fixed rate portions with repayment dates stretching to 2066. The longest dated portion, maturing in 2066, carried preliminary price guidance of up to 135 basis points above comparable United States Treasuries.
Proceeds from the Microsoft bond sale are for general corporate purposes under the filing, which leaves capital spending among several possible uses rather than earmarking the money only for artificial intelligence. The company said net proceeds may fund working capital, capital expenditures, stock repurchases, acquisitions and repayment of existing debt. Microsoft and the underwriting banks declined to comment on the reported size when Reuters asked, and Microsoft pointed Reuters to a regulatory filing confirming the offering without disclosing its size. The notes are senior unsecured, which means investors hold interest and repayment claims against Microsoft without specific assets pledged as collateral.
Microsoft bond sale and AI spending
The Microsoft bond sale follows comments from chief financial officer Amy Hood, who told investors on the company’s earnings call on October 28 that Microsoft would pursue additional funding when it believes terms are attractive, to preserve cash flow and financial flexibility. She had outlined that approach a day before the bond sale launched. Microsoft is aiming for $170 billion in capital expenditures in 2026 as it expands infrastructure for customers including Anthropic and OpenAI, according to CNBC. In the September 2026 quarter, Microsoft spent about $45.2 billion on capital expenditures, below an earlier forecast of $50 billion, TipRanks reported. Azure, the cloud computing service, increased revenue 48 percent to $33.2 billion in the September quarter.
The Microsoft bond sale comes as Microsoft reported $58 billion in operating cash flow in the September quarter and $18.6 billion after cash investment in property and equipment, according to WinBuzzer’s summary of the results. Unlike some rivals, Microsoft expects to keep generating positive free cash flow in its current financial year ending June 2027. Alphabet reported a $9.07 billion cash burn in the third quarter, while Meta Platforms recorded its first cash burn in more than a decade last week, Reuters reported. Tigress Financial analyst Ivan Feinseth told MarketWatch that Microsoft is taking advantage of its AAA rating to secure long term capital, preserve liquidity and speed up investment in data centers, cloud capacity and artificial intelligence infrastructure.
Microsoft bond sale in a wider debt wave
In market terms, the Microsoft bond sale makes Microsoft the first highly rated hyperscaler to sell bonds since August, Morningstar reported, and the first United States investment grade corporate bond financing since Blackstone backed QTS Realty Trust raised $3.9 billion on August 18, according to BofA Global data cited by Morningstar. Alphabet priced a $25 billion bond offering on August 6, with a similar maturity structure. Major technology firms have increasingly turned to debt and equity markets to fund artificial intelligence infrastructure, a shift from their traditional reliance on large cash reserves. Market estimates put capital spending needs at about $1 trillion in each of the next few years to build enough data centers for artificial intelligence models, Morningstar reported.