Microsoft Prices $25 Billion Bond Offering as Orders Peak at $115 Billion
Key Facts
On October 29, Microsoft announced pricing its first unsecured bond offering, with a total value of $25 billion, turning a financing plan that was still being defined into a deal with a set amount. Investor orders peaked at $115 billion, or 4.6 times the offering size, according to people familiar with the matter cited by Bloomberg. Reuters had reported before the pricing announcement that orders exceeded $100 billion, or more than four times the size of the offering. The figures reflect broad demand for the company’s debt in the deal. The offering is scheduled to close on November 4, 2026, according to a Microsoft statement.
The offering includes two floating-rate tranches, each worth $1 billion, with the first maturing on November 3, 2028, and the second on November 3, 2029. These tranches are part of an offering with a total value of $25 billion, while the company statement in the information available here does not specify the maturities or coupons of the other tranches. Microsoft described the bonds as senior unsecured obligations, the designation that distinguishes them in the announced debt structure. Net proceeds will be used for general corporate purposes and may include capital expenditures, share repurchases and repayment of existing debt. This use does not restrict the funds to a specific project.
The deal follows quarterly results showing revenue of $92.3 billion for the quarter ended September 30, 2026, up 19% year over year, while operating income rose to $45.9 billion, up 21%, according to the company statement. Diluted earnings per share were $4.92 on a GAAP basis, up 32%, and $4.89 on a non-GAAP basis, up 18%. Azure revenue grew 48% in the first quarter of fiscal 2027. The results provide context for the company’s activity, but do not mean the bond proceeds were allocated to cloud or artificial intelligence. The offering terms specified general purposes.
Remaining commercial performance obligations rose 73% to $677 billion in the first quarter of fiscal 2027, Microsoft said. Alongside this expansion in contractual obligations, the company returned $10.2 billion to shareholders in the same quarter through dividends and share repurchases. The bond terms allow net proceeds to be used for share repurchases as part of general corporate purposes, without specifying an amount for that use. Chief Financial Officer Amy Hood said the company would turn to additional funding sources “when we see that it is attractive.” She referred to maintaining cash flows and financial flexibility.
The company’s previous offering provides a point of comparison: in January 2017, Microsoft announced pricing senior unsecured bonds with a total value of $17 billion. The current offering, valued at $25 billion, comes more than nine years after the company’s last U.S. investment-grade bond issuance, according to a Reuters report. Microsoft said it expects to continue generating positive free cash flow during its current fiscal year, which ends in June 2027. This puts the cash-flow outlook alongside the company’s turn to capital markets, without changing the announced general use of proceeds. The deal remains scheduled to close on November 4, 2026.
In the stock market, Microsoft shares fell to $530.14 at the close on October 29, from $531.01 in the previous session, according to EL7 data. Reuters reported that the stock fell 0.7% in afternoon trading on October 29, before the company issued positive forecasts for cloud sales in the current quarter after Wednesday’s close. Reuters’ percentage refers to trading during the afternoon, while the two figures recorded by EL7 reflect closing prices on two consecutive days. On financing, Reuters noted that Microsoft expects positive free cash flow during the current fiscal year. The next near-term step in the deal is the offering’s close on November 4.