Microsoft elects to take on debt, repurchase shares

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.