Microsoft Microsoft today placed a $3.25 billion offering across 1.625% five-year notes at T+35, 3.625% 10-year notes at T+90, and 4.875% 30-year bonds at T+105, sources said. Spreads were set firm to initial whispers in the T+45, T+100, and T+110 areas, respectively.
The five-year yield was, at the time, the lowest recorded in 2013, after Microsoft established the lowest-ever funding costs at that tenor with 0.875% notes due 2017 inked last November at T+27, or 0.993%.
For reference, the 2.375% notes due 2023 traded in recent sessions at G-spreads in the high T+80s, while the 3.75% bonds due 2043 changed hands yesterday in the low T+90s, trade data show.
Redmond, Wash.-based Microsoft’s spreads, triple-A ratings profile, and stable ratings outlooks have held steady this year through a round of aggressive fiscal developments, including the announcement in September of a new $40 billion share-repurchase authorization and a 22% increase to its dividend payout.
Also in the third quarter, Microsoft agreed to acquire Finland-based Nokia Nokia’s devices and services business and to license Nokia’s patents and mapping services, for total consideration of roughly $7.2 billion. The company earmarked its large balances of overseas cash for the acquisition.
Of note, Microsoft faces the maturity next June of $2 billion of 2.95% notes, which represent its only long-term maturity next year. It bought back nearly $6 billion of its shares over the 12 months through September, or the most in two years, according to S&P Capital IQ.
Terms:guidance T+40 area (+/- 5 bps); IPT T+45 areamake-whole T+15 until notes are callable from three months prior to maturityguidance T+95 area (+/- 5 bps); IPT T+100 areamake-whole T+20 until notes are callable from six months prior to maturityproceeds for GCP, which may include funding for working capital, capital expenditures, the repurchase of capital stock, acquisitions, and repayment of existing debt