# Microsoft Prices $25 Billion of Bonds in Its First Sale Since 2017, Borrowing Out to 2066 at 1.05 Points Over Treasuries

Times of AI Desk · 2026-10-29 · Industry

[https://timesof.ai/2026/10/microsoft-25b-bond-sale-first-since-2017-ai-capex](https://timesof.ai/2026/10/microsoft-25b-bond-sale-first-since-2017-ai-capex)

> Microsoft's final term sheet, filed with the SEC on Oct. 30, shows it priced $25 billion of notes in ten series on Oct. 29, its first U.S. high-grade bond sale since 2017. Maturities run from 2028 to 2066, and coupons range from 4.85% to 6.35%. Final spreads came in well inside the initial price talk Investing.com reported. The filing gives general corporate purposes as the use of proceeds and does not tie the money to AI.

One of only two AAA-rated U.S. companies is borrowing in size for the first time in nine years, and the timing points to the AI build-out even though the paperwork does not. Microsoft filed a preliminary prospectus supplement with the SEC on **October 29** for its first U.S. high-grade bond sale since 2017, a day after reporting quarterly results that showed [capital spending doubling from a year earlier](https://timesof.ai/2026/10/microsoft-fy27-q1-openai-10b-revenue-azure-33b).

**Updated November 2, 2026:** Added the final terms from Microsoft's pricing term sheet, filed October 30, and a comparison with other recent AI financings. The figures from the preliminary filing and the size reporting below are kept as originally published.

## November 2: The final terms

The pricing term sheet, dated October 29, settles the size at exactly **$25 billion**: $2 billion of floating-rate notes due 2028 and 2029, and $23 billion of fixed-rate notes in eight series. The largest fixed-rate series are $4 billion each due 2036 and 2056. Coupons run from **4.85%** on the 2028 notes to **6.35%** on the notes due 2066, and the 40-year notes were priced to yield 6.356%, or 1.05 percentage points over the benchmark Treasury. The sale settles on November 4.

Final pricing came in well inside the initial talk. Investing.com had reported initial price talk of 130 to 135 basis points over Treasuries for the 40-year bonds; the final spread was 105. For the two-year fixed notes, the talk was 50 to 55 and the final spread 25. Spreads usually tighten from initial talk when orders exceed the amount on offer.

The pricing shows how much cheaper borrowing is for Microsoft than for some of the companies it competes with. Earlier in October, the Financial Times reported that Anthropic was offering Blackstone a 10% coupon on [junior debt in a $60 billion TPU financing](https://timesof.ai/2026/10/anthropic-project-north-star-60b-tpu-blackstone). That deal is structured differently and partly guaranteed, so the rates are not directly comparable. Still, Microsoft can borrow for 40 years at under 6.4%. IREN, a smaller compute provider, [borrowed $363 million against GPUs already in service](https://timesof.ai/2026/10/iren-363m-equipment-financing-ai-compute) and did not disclose a rate. In the AI build-out, a AAA balance sheet lets Microsoft finance data centres more cheaply than most of the companies building them.

## What the filing says

The filing, marked "subject to completion", covers ten series of notes: two floating-rate and eight fixed-rate. The amounts, interest rates and maturities are left blank. Microsoft says it will use the proceeds for "general corporate purposes, which may include… working capital, capital expenditures, repurchases of our capital stock, acquisitions and repayment of our existing debt." J.P. Morgan, UBS Investment Bank and Wells Fargo Securities are the joint book-running managers.

## What has been reported about size

Investing.com, citing Bloomberg and the offering terms, reports that Microsoft is seeking at least **$25 billion** across ten tranches with maturities from two to 40 years. Its last sale of this kind, in 2017, raised **$17 billion**, according to the report. Microsoft is rated AAA by both Moody's and S&P, a rating only Johnson & Johnson also holds among U.S. companies, the report says.

Initial price talk, expressed as a spread in basis points, ranged from 50 to 55 for the two-year notes to 130 to 135 for the 40-year bonds due 2066, and the sale is expected to settle on November 4, according to Investing.com.

## The capex read

The prospectus does not say the money is for AI data centres; capital expenditure is one of several listed uses. Read alongside the doubling in quarterly spending, the sale suggests that even a AAA-rated balance sheet is choosing to fund part of the build-out with debt running as long as 40 years rather than with cash flow alone.

## Limits

- When first published on October 29, size and pricing were not final; the final figures above come from the October 30 pricing term sheet.
- The cost-of-borrowing comparison is analysis. The Anthropic figures are a single-source FT report for a differently structured deal.
- The Bloomberg report could not be read directly by Times of AI; its figures are taken from Investing.com's account, which cites Bloomberg and the offering terms.
- The link to AI spending is an inference from Microsoft's capital spending, not a stated use of proceeds.

## Sources

- [SEC: Microsoft Corporation pricing term sheet, Form FWP (filed October 30, 2026)](https://www.sec.gov/Archives/edgar/data/789019/000119312526439794/d799291dfwp.htm)
- [SEC: Microsoft Corporation preliminary prospectus supplement, Form 424B2 (October 29, 2026)](https://www.sec.gov/Archives/edgar/data/789019/000119312526437008/d150456d424b2.htm)
- [Investing.com: Microsoft seeks at least $25 billion in first bond sale since 2017 (October 29, 2026)](https://www.investing.com/news/stock-market-news/microsoft-seeks-at-least-25-billion-in-first-bond-sale-since-2017-4983281)