Microsoft Plans to Raise at Least $25 Billion in First Bond Sale Since 2017
Key Facts
Microsoft plans to raise at least $25 billion through a U.S. bond offering, its first debt sale since 2017, Reuters reported, citing Bloomberg News on Thursday, October 29. The move marks the company's return to the borrowing market as it expands capital investment and its cloud computing business continues to grow. Microsoft did not immediately respond to a request for comment, according to the report. The size of the offering could change depending on demand, reports on the deal said. The latest quarterly results point to an expansion in the activity supporting this growth, with the company recording revenue and cloud growth in the quarter ended September 30, 2026.
Microsoft said revenue reached $92.3 billion in its first fiscal quarter, up 19% year over year. Microsoft Cloud revenue was about $63.9 billion, up 30% from the same period a year earlier, or 31% excluding the impact of foreign exchange rates. Azure revenue also rose 48% during the quarter. These figures place the proposed bond sale in the context of an expanding cloud business, while providing computing capacity requires investment in infrastructure. The results alone do not specify how much of the proceeds would go toward those investments.
The company said proceeds from the bonds would be allocated to general corporate purposes, including capital expenditures, working capital, share repurchases, acquisitions and repayment of outstanding debt. That stated use makes the offering broader than financing a single project or earmarking the funds for data centers. Microsoft said in its annual report that it added 88 data centers during fiscal 2026, while expanding Azure into new regions. It also reported commitments of $34.6 billion for new buildings and improvements, mostly related to data centers, through June 30, 2026. These commitments form part of the capital backdrop as the company returns to the bond market.
Commercial customer commitments also reflect the expanding base of Microsoft's cloud business, with commercial remaining performance obligations rising 73% to $677 billion in the quarter ended September 30, 2026. Its annual report had shown the metric rising 84% to $678 billion in fiscal 2026. The metric measures the value of commercial contracts not yet recognized as revenue, providing an indication of contracted business alongside quarterly revenue growth. In the same period, Microsoft returned $10.2 billion to shareholders through dividends and share repurchases. The combination of expansion commitments and shareholder returns places the scale of financial needs in a broader context than infrastructure spending alone.
In April, the chief financial officer said Microsoft expected to invest about $190 billion in capital expenditures during calendar 2026, including about $25 billion from the impact of higher component prices. He also said the company expected capacity constraints to continue through at least the end of 2026, despite investments and efforts to bring computing capacity online faster. On its fiscal 2027 first-quarter earnings call, the company said it expected capital expenditures to exceed $50 billion in the second quarter. That near-term forecast puts spending at the forefront of developments expected after the proposed offering was announced. Microsoft shares closed at $531.01 on October 28, 2026, the day before the deal was reported.