A report suggests that Microsoft is all to sell its debt this year.
Financial news agency Bloomberg reports that Microsoft plans to sell its debt later this year to buy back shares and settle dividends at its board meeting to decide its dividend rate, held in September every year.
According to an anonymous source familiar to the matter, the Redmond-based software giant needs to take the step as a significant part of its cash is stuck in foreign markets.
The company has decided to raise nearly $5 billion by selling its debt, but cannot afford to raise any more as it would risk losing its AAA rating.
“They obviously think their stock is cheap and getting debt is cheap, so why not issue debt,” Jason Brady, of Thornburg Investment Management told Bloomberg.
The software giant's shares rose 5.3 per cent or $1.26 per share on Monday to reach $25.11 per share after Bloomberg's report.