Microsoft May Borrow for First Time to Buy Yahoo

Jan 4, Bloomberg

Feb. 4 -- Microsoft Corp. will probably sell bonds for the first time to finance its proposed $44.6 billion takeover of Yahoo! Inc., offering a top-rated investment in a newcomer to the debt markets.

The world's largest software maker will use cash and stock to pay part of the $31 a share it has bid for Yahoo in the biggest technology takeover ever. It will raise the rest in a debt sale, Chief Financial Officer Chris Liddell told analysts today in New York. He didn't say how much he's likely to borrow.

A Microsoft bond may attain the highest AAA rating, according to James Crandall, head of syndication at Calyon New York. He compared the maker of the Windows operating system with General Electric Capital Inc., last year's most prolific borrower, and Warren Buffett's Berkshire Hathaway Inc.

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photo: Bill Gates, chairman of Microsoft Corp., speaks during the Consumer Electronics Show (CES) in Las Vegas, Nevada, on Jan. 6, 2008. Photographer: Ronda Churchill/Bloomberg News