Microsoft Corp. is paying higher yields on new bonds than in a November sale after it beat the planned return of Apple Inc. to the credit market after an absence of almost two decades.
The company, one of four U.S.-based businesses with the highest ratings from Moody’s Investors Service and Standard & Poor’s, issued $1.95 billion of dollar-denominated debt last week with a weighted average coupon of 2.41 percent, exceeding the 2.33 percent for similar bonds it sold five months earlier even with interest rates at about the same level. The latest sale came two days after Apple said it would use debt to help fund a $55 billion addition to a plan to return cash to shareholders.
Microsoft sold $450 million of 1 percent, five-year bonds, $1 billion of 2.375 percent debt due 2023 and $500 million of 30-year securities with a coupon of 3.75 percent, according to data compiled by Bloomberg. Those notes had higher coupons and wider spreads that those linked to similar portions of bonds the company issued Nov. 2.
With Microsoft, “people can probably get a pretty decent fill and may already have enough exposure,” Lon Erickson, a Santa Fe, New Mexico-based money manager at Thornburg Investment Management Inc. who oversees about $6 billion of taxable fixed- income assets, said in a telephone interview. “They don’t necessarily need to go into the market full force like they would with something like Nike or, clearly, Apple.”