August 2, 2016

By Edward Jones

$19.75bn: Largest bond ever priced by Microsoft

On August 1, Microsoft priced a $19.75bn investment grade (IG) corporate bond, the fifth largest corporate bond sale on record globally, and the third largest this year, behind Anheuser-Busch InBev’s $46.0bn IG deal in January and Dell’s $20.0bn IG deal in May. The deal follows Microsoft’s pending $28.1bn acquisition of LinkedIn, announced on June 13, its largest ever acquisition.

AAA Largest bond by a triple A-rated issuer

The bond is the largest by an AAA-rated issuer on record, ahead of Microsoft’s $13.0bn deal in October 2015, its previous biggest deal. The deals comprises 7 US dollar fixed-rate tranches, of which the 3yr, 7yr, 20yr and 40yr have the lowest coupons for their maturities across all Microsoft bonds, however, these 4 maturities have only been issued by the company since 2015 (3 deals). The 5yr (1.55%), 10yr (2.4%), and 30yr (3.7%) coupons are the lowest for Microsoft since the record lows of a $2.25bn bond priced in November 2012 (0.875%; 2.125%; 3.5%).

$1.22tr: Record YTD high for corporate IG issuance

Global corporate (ex-FIG) IG bond issuance totals $1.22tr in 2016 YTD, the highest in a YTD period on record and up 6% on the $1.15tr in same period last year. Volume has surpassed $1tr for 4 consecutive YTD periods, each a record high at the time.

BAML Top bookrunner for global corporate bonds

Bank of America Merrill Lynch leads the global corporate bond bookrunner ranking in 2016 YTD with a 6.4% market share. JPMorgan ranks second with 6.3% and Citi is third with 5.4%. As all three banks are bookrunners on the Microsoft bond, the top three places are unchanged by the deal.