Microsoft sold $25 billion of bonds across ten series, according to its pricing term sheet dated 29 October 2026 and filed with the SEC on 30 October. Its eight fixed-rate series priced at 25 to 105 basis points over their benchmark Treasuries. By our arithmetic, the eight fixed-rate series, $23 billion of the total, priced at a size-weighted average of about 64 basis points over their benchmark Treasuries, with an average coupon of about 5.58%.
On 30 October, Treasury yields fell again while Nasdaq-100 futures traded lower. CNBC data showed the 10-year yield at 4.929% at 13:44 UTC, down 6.0 basis points from the previous close, and the 2-year at 4.604%, down 5.2 basis points.
Short explainer · Microsoft’s $25B Bond: 25 to 105bp Over Treasuries
A vertical news Short narrated from this piece’s headline and opening line.
Business Pill · Free Cash Flow
A one-minute explainer of free cash flow: the cash a business has left after capital spending. It teaches the general idea only and says nothing about Microsoft’s bond sale.
The key insight:Microsoft’s term sheet prices its eight fixed-rate series at 25 to 105 basis points over Treasuries, about 64 basis points on a size-weighted basis and about $1.28 billion of coupons a year by our arithmetic, and Treasury yields fell further on 30 October.
Credit contrast (30 Oct): Intel’s CDS hit a record. Intel’s five-year credit default swap widened to a record 123.5 basis points, according to Markit data cited by @DeItaone, as the shares slid about 30%. Microsoft priced its $25 billion of new bonds at about 64 basis points over Treasuries (our arithmetic from the term sheet). These are different measures, a CDS premium and a bond spread over Treasuries, so the two numbers are not directly comparable.
Real yields drove the 5-28 Oct fall in 10-year Treasuries (30 Oct). Between 5 and 28 October the 10-year Treasury yield fell from 5.31% to 5.05%, a 26 basis-point drop, according to St. Louis Fed (FRED) data. The 10-year TIPS real yield fell from 2.95% to 2.67%, or 28 basis points, while the 10-year breakeven inflation rate edged up from 2.36% to 2.38%. By our arithmetic, the fall in real yields more than accounts for the whole decline in the nominal yield, with breakevens adding 2 basis points. Brent’s daily price ranged between $114.82 and $135.51 a barrel in October through the latest FRED reading. The X account @nodiligence reads this as the bond market treating the AI selloff as a growth problem, not an inflation one, with buyers adding duration on the view that the capex boom slows growth, and argues that the Fed’s September rate rise looks worse as real yields fall. The Fed raised rates by a quarter point on 16 September and held on 28 October, when two members preferred another rise.
The term sheet lists $1 billion each of floating-rate notes due 2028 and 2029, paying Compounded SOFR plus 35 and 53 basis points, and eight fixed-rate series from 2028 to 2066. The largest are $4 billion of 5.550% notes due 2036 and $4 billion of 6.250% notes due 2056. The longest, $2 billion due 2066, carry a 6.350% coupon at 105 basis points over the benchmark.
The notes are rated “Moody’s: Aaa (stable outlook); S&P: AAA (stable outlook)”, the term sheet says, with J.P. Morgan, UBS and Wells Fargo among the joint book-running managers. Settlement is “November 4, 2026”. Our 29 October piece reported the preliminary filing, which left sizes and coupons blank.
Benchmark Treasury yield and Microsoft yield to maturity for each of the eight fixed-rate series in Microsoft’s pricing term sheet dated 29 October 2026, filed with the SEC on 30 October. The $2 billion of floating-rate notes are not shown. The size-weighted average spread of about 64 basis points is our arithmetic.
What Was Posted on X
the bond market is treating the AI selloff as a growth problem, not an inflation one. the whole drop in the 10-year this month came out of real yields.
— from 5 oct to 28 oct the 10y treasury went from 5.31% to 5.05%. — the TIPS real yield (the part that’s growth and term premium, with inflation stripped out) fell from 2.95% to 2.67%. — the breakeven (what the market expects inflation to average) went from 2.36% to 2.38%, and that’s with brent between $115 and $136 the entire month.
so oil isn’t moving inflation expectations at all, and the rally is people buying duration because they think the capex boom slows growth from here.
if that’s right, the fed’s september hike looks worse every week the real yield keeps falling, and the market starts pricing a cut while CPI is still where it is.
The X account @nodiligence argues the bond market is treating the AI selloff as a growth problem, not an inflation one, citing the 10-year Treasury falling from 5.31% to 5.05%, the TIPS real yield from 2.95% to 2.67% and the breakeven rising from 2.36% to 2.38% between 5 and 28 October.
The Numbers Only the Term Sheet Gives
By our arithmetic, the fixed-rate series will pay about $1.28 billion of coupons a year, before the floating-rate notes. Notes due in 20 years or more, the 2046, 2056 and 2066 series, total $8 billion, 32% of the deal. The spread rises by 80 basis points from the shortest fixed series to the longest.
Microsoft’s coupons run from 4.850% to 6.350%. For comparison, our GPU debt piece found CoreWeave paying 9.625% on unsecured notes and IREN 9.0% without a Microsoft contract behind it, against about 6% when a Microsoft or Meta contract stands behind the debt. Our cash-versus-capex piece found Microsoft was the only one of Amazon, Alphabet, Microsoft and Meta whose operating cash covered its capex in the latest quarter.
The Rates Move
The rally came after the Federal Reserve held rates on 28 October. Its statement said the Committee “decided to maintain the target range for the federal funds rate at 3-3/4 to 4 percent” and that “Inflation remains elevated.” Two members, Lisa D. Cook and Beth M. Hammack, “preferred to raise the target range for the federal funds rate by 1/4 percentage point at this meeting.”
CNBC data at 13:44 UTC showed the 5-year down 6.8 basis points and the 30-year down 3.5. Earlier, Reuters said the 10-year yield fell by more than 7 basis points in Tokyo trade to 4.91%, “for a fall of some 37 basis points through October”, which our Asia piece reported. Yahoo Finance data at 13:29 UTC showed Nasdaq-100 futures at 28,815, 2.53% below the 29 October session by our arithmetic. Our Magnificent 7 piece tracks how far the biggest tech stocks sit below their highs.
Reuters also reported at 13:17 UTC that investors pulled money from US equity funds ahead of the hyperscaler earnings, according to its headline; we read only the headline.
The Structural Read
As we read the term sheet, Microsoft locked in long-dated money: by our arithmetic $8 billion, 32% of the deal, is due in 20 years or more.
As we read the market data, yields fell across the curve on 30 October while Nasdaq-100 futures traded lower, after a Fed statement in which two officials preferred a rate hike.
As we read our prior coverage, the rates on Microsoft’s notes sit in a different range from the 9.0% to 9.625% that CoreWeave and IREN pay on debt without a large customer contract behind it.
Federal Open Market Committee statement, 28 October 2026
“The Committee decided to maintain the target range for the federal funds rate at 3-3/4 to 4 percent”
Three Implications
FOR MICROSOFT The term sheet lists coupons from 4.850% to 6.350% and a settlement date of November 4, 2026; by our arithmetic the fixed-rate series carry about $1.28 billion of coupons a year.
FOR RATES CNBC data at 13:44 UTC showed the 2-year down 5.2 basis points and the 10-year down 6.0 basis points from the previous close.
FOR AI BORROWERS Our prior coverage reports CoreWeave paying 9.625% on unsecured notes and IREN 9.0% without a Microsoft contract behind it, against about 6% with one.
The analysis puts it this way: “It is a sovereign-scale financing problem dressed in tech-company clothing — and the financial architecture is starting to invert.”
As we read it, Microsoft’s term sheet is one data point on that architecture: $25 billion at 25 to 105 basis points over Treasuries on its fixed-rate series, $8 billion of it due in 20 years or more by our arithmetic. The analysis does not discuss this deal.
What Is Not Established
The term sheet does not state the order book size or the use of proceeds, and we did not find a final order-book figure in a source we could read. Market yields move during the day; the figures here carry their times. We have not established that AI-spending worries alone caused the move in Treasury yields.
This Week In The AI Supercycle
Anthropic’s Reality Check, The Capital Squeeze, & The New World Order
This piece is part of this week’s issue. Its read: the strongest names could still borrow cheaply. Microsoft paid about 64 basis points over Treasuries in the same week a BB rating was reportedly expected for Anthropic.
Microsoft’s final term sheet shows $25 billion raised, with the fixed-rate series at about 64 basis points over Treasuries on average by our arithmetic. On 30 October Treasury yields fell further, after a Fed hold in which two officials preferred a hike.
A note on sourcing. Deal terms come from Microsoft’s pricing term sheet filed with the SEC; Fed quotations from the FOMC statement of 28 October 2026; market yields and futures from CNBC and Yahoo Finance data at the times stated. Figures labelled our arithmetic are our own calculations.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
