Quick overview

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Salesforce intends to sell up to $25 billion in debt to finance a share buyback. This would be the software company’s largest-ever note sale. The people, who asked not to be named because specifics are confidential, stated that the company is aiming for a US bond offering of at least $20 billion.

 

The notes could be sold as early as this week, they added, though the exact date may vary.

The software company, which has come to represent Wall Street’s concerns about how AI will affect established vendors, announced a $50 billion stock buyback program, a 5.8 percent dividend increase, and a better-than-expected sales forecast.

Moody’s Ratings downgraded Salesforce to A2 on Tuesday, citing a debt-funded buyback as “a material shift in financial policy, including a higher tolerance for debt in the capital structure.” Meanwhile, S&P Global Ratings reduced its forecast to negative. The last time the company used the US bond market was in 2021, when it raised $8 billion to finance the purchase of Slack. Wells Fargo, Barclays, Citigroup, and JPMorgan declined to comment. A request for comment was not immediately answered by Salesforce or Bank of America.