Microsoft to raise $3.75 billion from unsecured note debt

Microsoft announced today as part of the $6 billion debt authorization approved by the company’s board back in September, 2008, that they would seek to raise $3.75 billion in senior unsecured notes. This is the first time in Microsoft’s 35-year history the company has raised funds by purchasing debt.

The notes will be issued in three groups:

* $2 billion in 2.95% short-term notes, maturing June 1, 2014 (5 years), which is 95 basis points above U.S. Treasury notes.
* $1 billion of 4.20% long-term notes, maturing June 1, 2019 (10 years), which is 105 basis points above U.S. Treasury notes.
* $750 million of 5.20% long-term notes, maturing June 1, 2039 (20 years), which is 105 basis points above U.S. Treasury notes.

Microsoft will use the net proceeds for general corporate purposes, which “may include funding for working capital, capital expenditures, repurchases of stock and acquisitions” — though there are no specific or defined plans for the money.

Microsoft is expected to close all details of the note offering by next Monday, May 18, 2009. A prospectus is available from J.P. Morgan Securities, Morgan Stanley & Co, or other underwriters. The bond issue has received a triple-A rating from Moody’s Investors Service.