Microsoft Raises $25 Billion Through Major Bond Sale
Microsoft has priced a $25 billion US bond offering, marking its return to the investment-grade debt market after more than nine years. The company announced the offering on October 29, 2026, as technology firms increase borrowing to finance artificial intelligence infrastructure.
The transaction attracted exceptionally strong investor interest. Initial demand exceeded $100 billion. Bloomberg later reported that orders reached approximately $115 billion, more than four times the offering’s value.
Microsoft structured the offering across 10 tranches, with maturities ranging from 2028 to 2066. The transaction includes floating-rate and fixed-rate notes, giving investors several options across different maturity periods.
Ten Bond Tranches Cover Multiple Maturities
The $25 billion offering comprises the following securities:
| Bond maturity | Principal amount | Interest rate |
|---|---|---|
| November 2028 | $1 billion | Floating |
| November 2029 | $1 billion | Floating |
| November 2028 | $2 billion | 4.85% |
| November 2029 | $3.25 billion | 5.00% |
| November 2031 | $3.25 billion | 5.20% |
| November 2033 | $2.5 billion | 5.35% |
| November 2036 | $4 billion | 5.55% |
| November 2046 | $2 billion | 6.15% |
| November 2056 | $4 billion | 6.25% |
| November 2066 | $2 billion | 6.35% |
The notes mature over four decades. Meanwhile, the longest-dated securities offer a 6.35% coupon.
The offering includes senior unsecured notes. Microsoft expects to close the transaction on November 4, 2026. Wells Fargo, JPMorgan Chase, UBS and several other financial institutions managed the sale.
AI Infrastructure Drives Microsoft’s Financing Strategy
Microsoft plans to use the proceeds for general corporate purposes. These may include capital expenditure, working capital, acquisitions, share repurchases and repayment of existing debt.
The financing comes as Microsoft expands its cloud computing and AI infrastructure. The company expects capital expenditure to reach approximately $170 billion in 2026. Moreover, demand from AI developers, including OpenAI and Anthropic, continues to increase pressure on its data centre capacity.
Microsoft CFO Amy Hood recently said the company would pursue additional funding when market conditions are attractive. She also highlighted the importance of maintaining cash flow and financial flexibility.
Microsoft’s strong credit profile also supports its borrowing strategy. S&P assigns the company an AAA credit rating, placing it among the highest-rated corporate borrowers. As a result, Microsoft can access long-term financing on comparatively favourable terms.
Big Tech Turns to Debt Markets for AI Investment
Microsoft’s bond sale reflects a wider financing shift across the technology industry. Major companies increasingly rely on debt and equity markets to support large-scale AI infrastructure projects.
Alphabet, Amazon, Meta and Oracle have also raised substantial funding through bond offerings. Meanwhile, these companies continue investing in data centres, specialised processors and cloud computing infrastructure.
However, rising borrowing requirements have attracted greater scrutiny from investors. Investors are asking about infrastructure costs, future AI revenues, and the time required to recover investments.
Microsoft’s successful offering demonstrates continued investor appetite for highly rated technology debt. Nevertheless, future borrowing costs may depend on market conditions and the financial returns generated by AI infrastructure.
Ultimately, the $25 billion transaction gives Microsoft additional financial flexibility as it expands its AI and cloud operations. It also highlights the growing role of capital markets in financing the global AI infrastructure race.
