Microsoft Will Sell More Than $4.7 Billion Worth of Bonds


Microsoft (MSFT) will sell more than $4.7 billion worth of bonds to fund share buybacks and dividend payments for shareholders of the world's largest software maker.

The company will sell about $2.7 billion worth of notes due by 2015, with the remainder of the debt payable in 2020 and 2040, Microsoft said in a Securities & Exchange Commission filing today. Microsoft had a $5.51 billion cash balance as of June 30, down 9% from a year earlier, the company said in July. The company also had $4.94 billion in long-term debt, up 32% from a year earlier.

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Microsoft is taking out loans to repay its shareholders as interest rates hover near record lows. The company said Tuesday that it would boost its quarterly dividend by 23% -- its first dividend increase in two years -- while its board authorized the company to issue as much as $6 billion of additional debt.

Microsoft Chief Financial Officer Peter Klein said at a Sept. 7 Citigroup conference that the company, whose debt rating is the highest possible at both Moody's Investors Service and Standard & Poor's, would consider taking on more debt to fund a higher dividend payment or buy back shares, according to a Bloomberg News report.