For the first time in Microsoft's history, Bloomberg is reporting that the company is planning to sell debt. Supposedly the debt is to help fund the repurchase of its equity. I am not sure I totally buy that argument. They have over 25 billion in cash. Now, I am sure that is not all accessible because it is spread all over the world and there would be big tax bills to move back to the U.S. but I wonder if Steve Ballmer and Bill Gates are not making another statement. If this isn't more a global macro call where they think over the next few years interest rates are going to surge and so they are locking in cheap cash now. I have no idea, it could simply be to fund stock repurchases, but Bill Gates is good friends with Warren Buffett and a large capital allocation decision like this shouldn't go unnoticed.
From the article:
Microsoft Corp., taking advantage of its top credit ratings, plans to sell 5-, 10- and 30-year debt, the world’s largest software maker said in a regulatory filing.