Microsoft issues bond. Takeover on cards?

As per regulatory filling, Microsoft has launched its bond issue in hopes of raising 3.75 billion US dollars, sparking rumors that the US software giant was contemplating a takeover bid.

In a statement, Microsoft said its using the net proceeds from the bonds “for general corporate purposes, which may include funding for working capital, capital expenditures, repurchases of our capital stock and acquisitions.”

Microsoft is gonna offer 5-year, 10-year and 30-year bonds. Following are the details for these 3 bonds
- Two billion US dollars of 2.95 percent notes due June 1, 2014
- One billion US dollars of 4.20 percent notes due June 1, 2019
- 750 million US dollars of 5.20 percent notes due June 1, 2039.

Microsoft has already issued two billion US dollars in commercial paper, or short-term debt, under a six-billion-dollar debt authorization made by its board late last year.

With Oracle recently buying out Sun for 7.4 billion US dollars, there were strong speculations that Microsoft is looking at buying out few small businesses including Yahoo search engine business for which it had offered 44.6 billion US dollars last year. Recently there was news on some kind of a co-operation between Microsoft and Yahoo as per which Yahoo will focus on Ad business while Microsoft will focus on developing technology for search.

It remains to be seen what a cash rich company like Microsoft will ultimately do with this 3.75 billion US dollars.