Microsoft bond issue sparks takeover rumors
Microsoft, in a filing with the US Securities and Exchange Commission (SEC), said that it would use the money for “general corporate purposes” and planned to offer five-year, 10-year and 30-year notes.
The Redmond, Washington-based company did not specify how much it hoped to raise from the bond offering, but Fitch Ratings put the amount at $3.75 billion.
Microsoft has already issued two billion dollars in commercial paper, or short-term debt ,under a six-billion-dollar debt authorization made by its board late last year.
Moody’s Investors Service assigned a “AAA” rating, its highest, to Microsoft’s offering.
“The AAA rating for the company’s inaugural debt issuance reflects the company’s position as the world’s largest software company with a strong and defensible market position throughout its diverse core offerings” Moody’s Richard Lane said.
Moody’s added that Microsoft’s “very strong debt protection measures are supported by over $22 billion of operating profit and nearly $12 billion of free cash flow in a challenging business environment.”
Microsoft was rebuffed last year in a $47.5 billion bid to take over Yahoo! but management has since changed at the Internet firm and the two companies have reportedly discussed a potential partnership.
Microsoft chief executive Steve Ballmer has said repeatedly that he is open to a tieup with Yahoo! on Web search, dominated by rival Google.
Business software firm SAP was seen as another potential target for Microsoft.
Microsoft shed 0.51% in New York on Monday to close at $19.32.
Microsoft bond issue – who do you think they want to buy?
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