Microsoft to repay existing debt with proceeds from debt issuances

By Sarah Lizee

Olympia, Wash., Aug. 3 – Microsoft Corp. said it has or will use proceeds from debt issuances for repayment of its existing debt, according to a 10-K filing with the Securities and Exchange Commission.

As of June 30, Microsoft’s long-term debt included notes totaling $76,898,000,000.

The company has two $5 billion credit facilities that expire on Oct. 30, 2018 and October 31, 2022, respectively, which serve as a back-up for the Microsoft’s commercial paper program. The program had no commercial paper issued and outstanding as of June 30.

Microsoft said that as of June 30 it was in compliance with the only financial covenant in both credit agreements, which requires it to maintain a coverage ratio of at least three times EBITDA to interest expense.

No amounts were drawn against the credit facilities as of June 30.

The company said it issued debt to take advantage of favorable pricing and liquidity in the debt markets, reflecting its credit rating and the low interest rate environment.

The proceeds were or will also be used for general corporate purposes, which may include for working capital, capital expenditures, repurchases of capital stock and acquisitions.

The computer software company is based in Redmond, Wash.

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