Microsoft has launched its first bond issue in hopes of raising US$3.75 billion, sparking rumors the US software giant was contemplating a takeover bid.
Microsoft, in a filing with the US Securities and Exchange Commission (SEC), said that it would use the money from the bond issue launched on Monday for “general corporate purposes” and planned to offer five-year, 10-year and 30-year notes.
The Redmond, Washington-based company announced its offering, which is set to close on Monday, would reach US$3.75 billion of senior unsecured notes.
Microsoft offered notes that would mature in five, 10 and 30 years. The sale was divided into US$2 billion of 2.95 percent notes due June 1, 2014; US$1 billion of 4.20 percent notes due June 1, 2019 and US$750 million of 5.20 percent notes due June 1, 2039.
The software giant “intends to use the net proceeds from the offering for general corporate purposes, which may include funding for working capital, capital expenditures, repurchases of stock and acquisitions,” it said in a statement.
Microsoft has already issued US$2 billion in commercial paper, or short-term debt, under a US$6 billion debt authorization made by its board late last year.
Moody’s Investors Service assigned a “AAA” rating, its highest, to the 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 US$22 billion of operating profit and nearly US$12 billion of free cash flow in a challenging business environment.”
The company was rebuffed last year in a US$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 tie-up with Yahoo on Web search, dominated by rival Google.
Business software firm SAP was seen as another potential target for Microsoft.
J.P. Morgan Securities Inc is the lead underwriter on the sale.
Microsoft’s issue comes on the heels of offerings by Whirlpool Corp, Nokia Inc and Starwood Hotels & Resorts Worldwide Inc
Meanwhile, Ballmer said in Mumbai yesterday that Microsoft was mostly through with job cuts.
The company continues to hire more employees in some areas, Ballmer said, without elaborating.
He is on his second trip to India in three years.
UPDATED (3:40pm): A suspected gas explosion at a shopping mall in Taichung this morning has killed four people and injured 20 others, as emergency responders continue to investigate. The explosion occurred on the 12th floor of the Shin Kong Mitsukoshi in Situn District (西屯) at 11:33am. One person was declared dead at the scene, while three people were declared deceased later after receiving emergency treatment. Another 20 people sustained major or minor injuries. The Taichung Fire Bureau said it received a report of the explosion at 11:33am and sent rescuers to respond. The cause of the explosion is still under investigation, it said. The National Fire
ALL-IN-ONE: A company in Tainan and another in New Taipei City offer tours to China during which Taiwanese can apply for a Chinese ID card, the source said The National Immigration Agency and national security authorities have identified at least five companies that help Taiwanese apply for Chinese identification cards while traveling in China, a source said yesterday. The issue has garnered attention in the past few months after YouTuber “Pa Chiung” (八炯) said that there are companies in Taiwan that help Taiwanese apply for Chinese documents. Minister of the Interior Liu Shyh-fang (劉世芳) last week said that three to five public relations firms in southern and northern Taiwan have allegedly assisted Taiwanese in applying for Chinese ID cards and were under investigation for potential contraventions of the Act Governing
STAY WARM: Sixty-three nontraumatic incidents of OHCA were reported on Feb. 1, the most for a single day this year, the National Fire Agency said A total of 415 cases of out-of-hospital cardiac arrest (OHCA) occurred this month as of Saturday, data from the National Fire Agency showed as doctors advised people to stay warm amid cold weather, particularly people with cardiovascular disease. The Central Weather Administration yesterday issued a low temperature warning nationwide except for Penghu County, anticipating sustained lows of 10°C or a dip to below 6°C in Nantou, Yilan, Hualien and Taitung counties, as well as areas north of Yunlin County. The coldest temperature recorded in flat areas of Taiwan proper yesterday morning was 6.4°C in New Taipei City’s Shiding District (石碇). Sixty-three nontraumatic OHCA
COMMITTED: Lai said that Taiwan deeply appreciated the leaders’ statement, adding that the nation would remain steadfast in working to advance regional peace and prosperity US President Donald Trump and Japanese Prime Minister Shigeru Ishiba on Friday reaffirmed the importance of peace and stability in the Taiwan Strait in a joint statement issued after they met in Washington for their first official meeting. Trump and Ishiba “affirmed their determination to pursue a new golden age for US-Japan relations that upholds a free and open Indo-Pacific and brings peace and prosperity to a violent and disorderly world,” the US-Japan Joint Leaders’ Statement said. “The two leaders emphasized the importance of maintaining peace and stability across the Taiwan Strait as an indispensable element of security and prosperity for the