Microsoft-linked QTS bond sale draws $8 billion in demand - Bloomberg

A $3.9 billion bond offering connected to Microsoft Corp. has seen demand surpass $8 billion, according to Bloomberg. This led to a size increase of roughly $1 billion from the initial target. The bonds are being offered through QTS Realty Trust LLC subsidiaries, which are part of a deal backed by Blackstone. The funds will be used to finance a data-center project in Georgia.

The debt will be issued by two special purpose liability subsidiaries of QualityTech LP, a unit of QTS. The offering features a coupon around the high-6% range, with a discounted price expected to push the yield into the low-to-mid 7% bracket. This yield aligns with that of single-B tier junk bonds, even though the bonds are anticipated to achieve an investment-grade rating.

Citigroup, Goldman Sachs, JPMorgan Chase, and Morgan Stanley were among the banks that engaged with investors last week regarding the transaction. The bonds are being managed by these financial institutions and have been advertised over several days. Pricing for the deal may occur as early as Tuesday, although ongoing negotiations could still result in changes to the plans. This report was AI-supported and subsequently reviewed by an editor.