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Microsoft surprised fixed income investors on Monday when it sold approximately $20 billion of debt to fund its merger with social network LinkedIn, the fifth biggest corporate bond sale on record.

The sale from the company, one of only two US allies to hold the opinion from Standard & Poor’s 500, was met with massive demand as portfolio managers seek out income. Trillions of dollars of sovereign and corporate debt are now trading with a yield below zero.

Microsoft, which agreed to a $26 billion purchase of LinkedIn in June as part of chief executive Satya Nadella’s attempt to stimulate growth, issued $19.75 billion of debt with seven maturities.

“It continues to be the basic grab for yield that exists in the world now,” a portfolio manager stated. “We are seeing tremendous interest from overseas. Even domestically you have pension funds and insurance companies that can’t get to their yield targets, but have to get as close as they can.”

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Fund managers have grumbled about progressively tough bond market liquidity, reducing their ability to buy large fragments of bonds in the secondary trading market without altering the price.

According to sources familiar with the deal, order books for the US software manufacturer’s sale exceeded $50 billion, with demand strongest for 10 and 30 year paper. The sale, which stands behind offerings from Verizon, Anheuser-Busch InBev, Actavis and Dell, was made up of fixed-rate notes maturing in between three and 40 years.

The agreement included $4 billion of 10 year notes, which was valued with a yield of 90 basis points above the benchmark US Treasury, or nearly 2.42 percent. Fresh 30 year bonds priced with a yield of 3.73 percent, 5 base points higher than existing debt that matures in 2045.

Offshore investors have moved into the United States at a brisk pace as central banks in Europe and Asia have reduced interest rates and introduced bond-buying programs.

Market strategists noted that non-US investors had implied a clear preference for investment grade corporate paper, boosting the $73 billion of inflows that the asset division has received in the year to date.

“The US investment grade marketplace is one of the last markets to offer any yield,” an investment analyst stated. “This is driving investors from around the globe to the US market.”

Market analysts believe that in recent gatherings with institutional investors in Asia, income was the priority and it has been for a while for foreign investors who have been appraised of their local market.

Microsoft joins a drawn-out list of US blue-chip companies taking advantage of record-low borrowing costs.

Market players have cried out for bonds sold by Apple, Walt Disney, Teva and Verizon over the previous month. The sale on Monday will increase US high-grade corporate bond sales for 2016 above the $500 billion mark, ranking behind only the levels of last year.

 

Impact of Job Cuts on Microsoft Stock

Microsoft will extend its earlier job cuts plan to include 2,850 additional positions. The  layoffs  will happen this year, according to the company’s Form 10-K filing on the U.S. Securities and Exchange Commission.

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In May, tech giant announced that it would reduce up to 1,850 jobs in its smartphone unit.

Shares of Microsoft fell 0.02 percent to $56.20 in after-hours trading on Thursday. Nearly 37.25 million of the company’s shares were, higher than its average 30 day volume of 36.66 million shares a day.

The software manufacturer’s strengths are present in several areas such as its steady stock price performance, impressive record of earnings per share growth, considerable return on equity, reasonable valuation levels and good cash flow from operations.

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