Microsoft Stocks Decline With $1.28 Billion in Annual Fixed Coupons

Microsoft MSFT, the cloud and enterprise-software giant, is taking on $25 billion in debtand a hefty annual interest bill. Shares declined 1.54% to $521.96 at 11:15 a.m. ET on October 30. The company’s October 29 financing announcement outlines senior unsecured notes whose proceeds can fund capital spending, acquisitions and refinancing. The cash adds flexibility. The coupons add a recurring expense.

The offering comprises $23 billion in fixed-rate notes and $2 billion in floating-rate notes, with closing expected November 4. Applying the stated coupons to the fixed-rate tranches puts annual interest at approximately $1.284 billion, before floating-rate costs and issuance adjustments. Microsoft has considerable scale to support that obligation: September-quarter cloud revenue reached $63.9 billion, up 30%, while total revenue hit $92.3 billion. The investor test is whether expanding capacity generates enough additional operating cash to cover both the investment and its financing…