Microsoft raises $25 billion in 10-tranche bond offering

Microsoft just asked the bond market for $25 billion. The bond market reportedly answered with $115 billion in orders.

The company priced a $25 billion senior unsecured bond offering on October 29, 2026, split across ten separate tranches. It is Microsoft’s first major US dollar-denominated debt sale since a $17 billion deal in January 2017.

Inside the $25 billion deal

The offering is a mix of two flavors of debt. Microsoft sold eight fixed-rate notes and two floating-rate notes.

The two floating-rate notes are worth $1 billion each. One comes due in 2028, the other in 2029. That leaves the remaining $23 billion in the fixed-rate tranches.

Those fixed notes carry coupons ranging from 4.85% to 6.35%. Maturities across the whole offering run from 2028 all the way out to 2066.

Underwriters on the deal included J.P. Morgan, UBS, and Wells Fargo. The issuance is scheduled to close on November 4, 2026.

Demand that outran supply

Orders reportedly totaled $115 billion, leaving the deal approximately 4.6 times oversubscribed.

Microsoft’s credit profile helped. The company holds AAA and Aaa ratings from S&P and Moody’s, the top marks each agency hands out.

Spreads landed between 25 and 105 basis points over Treasuries.

Why borrow when you have cash

According to the deal terms, net proceeds will go toward general corporate purposes. That category explicitly includes capital expenditures for AI infrastructure.

The bond sale followed Microsoft’s fiscal Q1 earnings report, in which the company outlined a significant increase in AI-related spending.

Part of a much bigger wave

Hyperscalers, the giant cloud providers that run most of the world’s computing capacity, have collectively issued $182 billion in senior notes in 2026. That compares with $93.3 billion in 2025.

What this means for investors and the tech sector

For equity investors, debt funding has a quiet advantage: it avoids diluting existing shareholders. Issuing stock to pay for data centers would shrink each shareholder’s slice of the company. Borrowing at spreads this narrow does not.

With $182 billion already issued in 2026, the bond market is becoming a central funding channel for the AI buildout.