Microsoft Corp. found ample demand for its $17 billion bondoffering Monday, allowing it to cut borrowing rates on its secondmultibillion note offering in six months.

The tech giant received at least twice as many orders as it hadbonds to sell, according to people familiar with the matter, whoasked not to be named because the deal is private. The longestportion of the offering, which generally refinanced debt maturingsoon, was a $2 billion, 40-year bond with a 4.5% coupon that yields1.4 percentage points above Treasuries, according to data compiledby Bloomberg. That's down from initial discussions of about 1.55percentage points.

Moody's Investors Service said Microsoft will use proceeds torefinance commercial paper it sold to help support its takeover ofLinkedIn. A regulatory filing shows that at the end of 2016,the company had $25.1 billion of the debt.

Microsoft's return was surprising given expectations thatPresident Donald Trump and Congress will approve a repatriation taxholiday for U.S. corporations with money abroad, said JackFlaherty, a New York-based money manager at GAM Holdings.Republicans are also weighing related proposals such as cuttingcorporate tax rates, changing interest deductibility and adjustingaccounting treatment of capital expenditures, which may delay thelegislation.

Money Abroad

“Are these last hurrahs? I'm not quite sure,” Flaherty said.“There are a lot of details. It's going to take a littlelonger.”

Microsoft, like many peers in the technology industry, holds thevast majority of its cash overseas. Under current laws, it wouldpay a tax rate of 35% to bring back any of the $116.3 billion itholds abroad. With 95% of its cash subject to repatriation taxes,it has relied on the debt markets to fund programs like stockbuybacks, acquisitions and refinancing deals.

Moody's Investors Service gave the bonds its top Aaa rating butmaintained its negative outlook on Microsoft. It expects thecompany's debt may exceed $90 billion this year if it goes back tothe market to fund dividends and share buybacks. Microsoft hadabout $59 billion of long-term debt at the end of last year,filings show. S&P Global Ratings assigned the bonds anequivalent AAA grade.

Barclays Plc and HSBC Holdings Plc managed the sale, accordingto a filing.

Bloomberg News

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