Microsoft-Linked Data Center Bond Issuance Size May Increase to $3.9 Billion

BlockBeats News, August 18th - According to Bloomberg, a $3.9 billion bond issuance related to Microsoft has attracted over $8 billion in investor demand, prompting the issuer to increase the transaction size by approximately $1 billion from the initial target.

The bond will be issued through a subsidiary of Blackstone-backed QTS Realty Trust LLC to finance a data center project in Georgia, USA. The debt is expected to be issued by two special purpose subsidiaries of QTS's QualityTech LP.

The bond issuance is expected to have a coupon rate of around 6% in the later tranche, and it will be issued at a discount to achieve an effective yield of 7% from the beginning to the middle tranche. Despite the expected investment-grade rating for the bond, its yield level is comparable to a Ba1/BB+ junk bond.

Citi, Goldman Sachs, JPMorgan, and Morgan Stanley held a conference call with investors last week to present this bond issuance. The mentioned banks are responsible for underwriting the transaction, which has been marketed to the market for several days.

The bond transaction could be priced as early as Tuesday, but discussions are still ongoing, and the final issuance plan may change.