Microsoft announced an issuance of US$ 25 billion in debt securities, its first operation of this kind in the American market since 2017. The offering was priced on October 29, three days after the company presented a voluntary severance program covering about 60,000 employees, amid rising investments in artificial intelligence infrastructure.
The operation was divided into ten series of bonds, with maturities between 2028 and 2066. There are US$ 23 billion in fixed-rate notes, whose annual rates range from 4.85% to 6.35%, and another US$ 2 billion with floating rates. Completion is expected on November 4, according to the company's statement and a prospectus registered on November 2.
The issuance ends a gap of nearly ten years without new offerings of this size by Microsoft in the United States. In January 2017, the company had raised US$ 17 billion through debt securities.
According to the documentation presented to investors, the proceeds may fund capital expenditures, operational needs, acquisitions, share buybacks and repayment of existing debt. Microsoft did not officially earmark the US$ 25 billion exclusively for artificial intelligence.
The financing comes after the company reported US$ 45.2 billion in capital investments in the quarter ended in September, mainly related to the expansion of its computing capacity. Approximately three quarters of that amount corresponded to shorter-lived assets, especially processors and GPUs, including memory and storage costs.
In the same period, the company recorded free cash flow of US$ 18.6 billion. CFO Amy Hood said, at the October 28 results presentation, that Microsoft intends to turn to additional funding sources when it finds attractive conditions, preserving its financial flexibility.
Voluntary exit program reaches more than a quarter of the workforce
On October 26, Microsoft announced a program that allows eligible employees to leave the company with financial compensation and career transition support.
The initiative covers approximately 60,000 of the 223,000 employees at the company, equivalent to about 27% of the global workforce. Participation is restricted to certain teams in the United States, Canada, the United Kingdom and India, including professionals up to hierarchical level 70.
The number represents the employees who can join the offer, not the number of layoffs actually carried out or planned. Participation is voluntary, and not all divisions take part in the program.
The company did not establish a direct causal relationship between the bond issuance and the severance offer. The two announcements, however, come during a period of expanding computing spending, in which Microsoft projects capital investments above US$ 50 billion in the quarter ending in December.
