Microsoft reaps the benefits of protecting its AAA credit rating

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Microsoft has protected its AAA credit rating — one of just two left in Corporate America, alongside Johnson & Johnson’s — and is reaping the rewards for its financial discipline. Despite the spreading fears about AI-related debt, the company raised $25 billion Thursday in its first bond offering since 2017. The deal’s 10-year portion cost just 5.6%, barely more than the US government pays to borrow.
Further down the ratings ladder, investors are getting choosier and demanding higher yields to take on the risk of lending to companies in the AI sector. SpaceX, rated three rungs lower than Microsoft at BBB, will pay as much as 8.75% for its $40 billion haul this week, and neocloud CoreWeave’s bonds, deep in junk-rated territory, have traded at yields above 15%. In the race to bankroll the AI boom, the bond market is drawing a stark dividing line between borrowing at a bargain and paying a punishing premium.

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