Microsoft launched a bond sale of about $25 billion on Thursday, October 29, its first U.S. investment-grade bond offering in more than nine years, according to Reuters. The company is borrowing as it builds data-center capacity for artificial intelligence. CNBC reports that the offering is expected to close on November 4 and that Microsoft lists general corporate purposes as the use of the money.

The sale came one day after an earnings call in which Chief Financial Officer Amy Hood said the company had not yet tapped debt markets. CNBC reports that Microsoft holds a AAA rating from S&P and that leasing, rather than bonds, has been its financing vehicle for the buildout so far.

What was sold

Bloomberg News first reported the deal, according to Reuters, and said Microsoft was selling as many as 10 tranches with maturities from two to 40 years. Wells Fargo, JPMorgan Chase and UBS Group were managing the offering. Reuters reported that no final decision had been made on the size, which could change with demand, and that Microsoft pointed it to a regulatory filing that confirms the sale without stating its size.

Other outlets give later detail. 24/7 Wall St. reported that the bonds priced on October 29, that orders peaked at $115 billion, about 4.6 times the amount sold, and that the 40-year tranche due in 2066 priced at 1.05 percentage points over Treasuries, as much as 0.3 points tighter than initial guidance. A version of the Reuters story carried by the Manila Times says one person familiar with the deal put orders above $100 billion. Lens could not open Bloomberg’s own report and found no individual tranche sizes or coupons in the sources it did open.

CNBC’s account differs slightly in wording: it says Microsoft announced pricing for $25 billion of new debt but gives no terms. The SEC’s filing index for Microsoft shows a prospectus supplement, form 424B2, filed on October 29, 2026. The previous 424B2 filings in that index are dated January 2017 and earlier, which is consistent with Reuters’s description of a gap of more than nine years.

Why Microsoft is borrowing now

CNBC reports that Hood told investors on the Wednesday call that leasing has been Microsoft’s main financing vehicle so far. She said the company is fortunate to have access to debt markets given its ratings and that “we haven’t yet tapped that.” Reuters quotes her as saying Microsoft will pursue additional funding “when we believe it is attractive to do so,” citing the need to preserve cash flow and financial flexibility.

The spending behind the borrowing is large. CNBC reports that management is targeting $170 billion in capital expenditures for 2026 to meet demand from AI labs including Anthropic and OpenAI and from other customers. 24/7 Wall St. and the market-analysis site XTB both put the calendar-2026 outlook at about $175 billion. 24/7 Wall St. says that is down from $190 billion in April, with most of the drop due to an accounting change that moves more future leases to operating leases, which are not counted as capital spending. The $170 billion and $175 billion figures come from different outlets and Lens could not reconcile them.

On the quarter, 24/7 Wall St. reports capital spending of $45.2 billion including finance leases and $39.4 billion in cash paid for property and equipment, with more than $50 billion expected next quarter. XTB reports revenue of $92.28 billion, up 19%, and Azure revenue of $33.17 billion, up 48%. XTB’s article contains an operating-profit figure that does not match its own margin figure, so Lens relies on it only for revenue, Azure and the accounting change.

Reuters reports that Microsoft expects to generate positive free cash flow in the fiscal year ending in June 2027. CNBC reports that Microsoft posted positive free cash flow on Wednesday, in contrast with Alphabet, Meta and Amazon, which each reported negative free cash flow in their latest quarters. According to 24/7 Wall St., Microsoft had $64.5 billion in cash and short-term investments and $31.1 billion in long-term debt before the sale.

How peers are paying for the buildout

Microsoft is joining a crowded market. CNBC notes that Amazon and Alphabet have issued bonds this year, that CoreWeave has used debt to expand its data-center footprint, and that Oracle announced on Wednesday plans to raise $10 billion in new debt. CNBC says Oracle expects to return to positive free cash flow in the second half of its fiscal 2028.

24/7 Wall St. reports that Alphabet sold $25 billion of bonds on August 6 and that hyperscalers and data-center developers have issued more than $313 billion of investment-grade bonds worldwide in 2026. Meta, for its part, announced a plan to raise up to $95 billion through stock sales, according to CNBC.

Credit-default swap prices, which measure the cost of insuring debt, show how investors rank these borrowers. 24/7 Wall St. puts Microsoft’s five-year contract at about 54 basis points, Meta’s at 116 and Oracle’s at 275. CNBC adds that investors have grown more cautious about companies carrying large debt loads while central banks raise interest rates to fight inflation.

Reuters reported that Microsoft shares fell about 1.2% in afternoon trading on Thursday. A version of the same story carried by the Manila Times gives 0.7%. 24/7 Wall St. reports a close of $530.14 on October 29, down 0.16%, and describes the timing of the sale as opportunistic, citing Brett Kozlowski of GW&K.

A new director and a lower pay package

Microsoft’s annual proxy statement, filed with the SEC, carries separate news. It names John Collison, the 36-year-old Stripe co-founder and president, as a nominee for the board. The filing says he was born in Ireland, has been at Stripe since 2010, held no public-company directorships in the past five years and is independent under the board’s standards.

Reid Hoffman and Hugh Johnston, each with nine years on the board, are not seeking re-election, according to the proxy. Johnston chaired the audit and finance committee. The filing lists 12 nominees, 11 of them independent, with Chief Executive Satya Nadella the exception. TNW reports that the board would shrink from 13 members to 12. Shareholders vote at a virtual annual meeting on December 8.

TNW notes that Stripe helps run Copilot Checkout, which Microsoft launched in January so U.S. users can buy from Etsy sellers and other shops inside its AI assistant, and that GeekWire observed the proxy does not mention business between the two companies. Stripe says businesses on its platform processed $1.9 trillion in payments in 2025, TNW reports.

On pay, TNW, relaying reporting from The Information, says shareholders are asked to approve a $90.6 million package for Nadella, about 6% below the $96.4 million of a year earlier. The proxy confirms that his target performance stock award is $50 million, unchanged since fiscal 2022, and that his cash incentive paid out at 129.03% of target on financial results and 156.67% on operational goals, an overall 137.32%, or $10.299 million.

TNW attributes part of the decline to a 5% fall in Xbox content and services revenue. The proxy text Lens read confirms that Xbox revenue fell 5% in fiscal 2026 and is one of four metrics, weighted 15%, in the performance stock awards. Lens did not locate the proxy’s summary compensation table and could not check the $90.6 million total. The board recommends votes against all four shareholder proposals, including one to separate the chair and CEO roles.

What to watch

Lens analysis: the bond sale shows Microsoft adding debt to a mix that, by Hood’s own account, has so far leaned on leases and internal cash. The size of the order book suggests investors were willing to lend to a AAA borrower for up to 40 years, though the coupons and tranche sizes that would show the real cost were not available in the sources Lens opened.

Several facts will become clearer in coming weeks. The offering is expected to close on November 4. Microsoft’s next quarter is expected to bring more than $50 billion in capital spending, according to 24/7 Wall St. Shareholders will vote on the board slate and on Nadella’s pay on December 8. CNBC’s Tech Download newsletter also reports that Microsoft announced voluntary buyouts for a wide group of employees on Monday, October 26, and XTB puts the number offered at about 60,000, a figure Lens could not confirm elsewhere.

Sources

Image: Building 92 of Microsoft Redmond Campus - panoramio.jpg by Jiaqian AirplaneFan, CC BY 3.0, via Wikimedia Commons. Illustrative photo; it does not show the events described.