Microsoft elects to take on debt, repurchase shares

SEATTLE — Chaos in the money markets gave Microsoft Corp. an opening Monday to announce that it would take on debt for the first time, launch a new $40-billion stock buyback plan and raise its dividend.

The moves indicate that for all the credit problems plaguing the financial sector, cash-laden technology companies with good credit ratings are still borrowing money on favorable terms and otherwise enjoying flexibility.

The largest information-technology company, Hewlett-Packard Co., approved an $8-billion buyback plan Monday. And Intel Corp. Chairman Craig Barrett told the Associated Press that the chip maker was feeling no squeeze from the credit crunch.

Microsoft, which had $23.7 billion in cash and short-term investments on hand as of June 30, said Monday that its board approved a $2-billion commercial paper program as part of a $6-billion, open-ended allowance for debt financing.

Microsoft shares rose 24 cents to $25.40.