NEW YORK (Reuters) - Microsoft Corp MSFT.O on Monday launched a $3.75 billion debt issue, its first foray into the U.S. corporate bond market as it joined a spate of companies taking advantage of good borrowing conditions.

Showgoers check the offerings at the Microsoft booth at the annual Consumer Electronics Show (CES) in Las Vegas, Nevada January 9, 2009. REUTERS/Rick Wilking

The cash-rich, “triple-A” rated Microsoft announced its first debt authorization last September, allowing it to issue up to $6 billion in debt. The bond sale, expected to price later on Monday, has attracted about $10 billion in demand, market sources said.

The sale is expected to include $2 billion of five-year notes yielding about 95 basis points over U.S. Treasuries, $1 billion of 10-year notes yielding about 105 basis points over Treasuries, and $750 million of 30-year bonds yielding about 105 basis points over Treasuries, according to IFR, a Thomson Reuters service.

Microsoft, the world’s largest software maker, has already issued about a third of its $6 billion debt authorization in the commercial paper market. It does not need financing but will use the proceeds for general corporate purposes, including working capital and buying back stock, according to a spokesman.

The company decided to take advantage of “good market conditions and Microsoft’s great credit rating,” a spokesman said. The software giant is rated AAA by Moody’s Investor Service and Standard & Poor’s and AA-plus, one notch lower, by Fitch Ratings.

Microsoft had cash and short-term investments worth $25.3 billion at the end of March.

Its shares were up 15 cents to $19.57 in afternoon trading on Nasdaq.

The deal is being led by JPMorgan JPM.N and Morgan Stanley MS.N, with Banc of America Securities BAC.N and Citigroup C.N as passive managers.

The debt sale had sparked talk that Microsoft could be readying a bid for German business management software firm SAP SAPG.DE, in light of a recent article in Barron's citing an analyst as saying SAP cannot remain independent forever.

SAP Co-Chief Executive Leo Apotheker, in New York unveiling an acquisition, declined to comment on a possible Microsoft bid but did say he believes his firm should stay independent.

SAP’s stock was up 2.85 percent in Germany.