Microsoft about to sell some of its debt: Rumors

According to a person who is familiar with the matter,

Microsoft Corp. is planning to sell debt this year, as much as it can. But the Company is not selling debt to emergency fiscal aid, or to propel Research and development: is is doing so to collect its cash held overseas. The company believes that much of its cash is scattered overseas. The company will thus use this debt to pay for dividends and share repurchases.

The company would try to raise as much as it can without jeopardizing its debt rating of AAA.

What does selling debt mean ?

It's Businesses and governments who sell debt to raise money for operations-- that can either be emergency fiscal planning, to excel Research and Development forward or to bring back the cash held with others to itself. To sell debt on the open market, companies sell their debt to investors (or public) by issuing debt instruments, such as bonds. Investors buy the bonds with the expectation that the issuer will redeem the bond by paying the investors back with interest at a future date. So after issuing debt instruments, the company buys the debt instrument at a higher price. This makes collecting the scattered money easy. --------

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