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Microsoft Debt Sale a Smart Idea

Reports that Microsoft may be planning a debt sale to pay dividends and buybacks makes perfect sense. Think of it this way: why not add leverage?

1) debt is cheap

2) company thinks its stock is undervalued

3) they are sitting on an enormous pile of cash: $42 billion

4) they can issue a large amount of additional debt — say, $10 billion — at insanely low rates.

Why not add leverage?

And they are just the latest. I mentioned earlier today that trading desks were telling me about corporate bond deals coming soon from:

Deere ,

Royal Bank of Scotland ,

Amgen ,

Comerica ,

Entergy and

Southern .

— And new high-yield offerings from Borg Warner , BE Aerospace , Huntsman, and others.

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  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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