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(Bloomberg) -- Why should having billions of dollars in cash in cash stop you from borrowing more?

That appears to be the logic at top-rated companies like Microsoft Corp. and Apple Inc. They’re selling bonds at an accelerating clip, locking in cheap interest rates for as long as 40 years.

“The cost of capital that you’re paying is so obscenely low that there’s no reason not to” borrow, said Jody Lurie, a corporate credit analyst at Janney Montgomery Scott LLC in Philadelphia. Corporate treasurers are wondering: “When is this wonderful market situation for these higher-rated credits going to end?”

Microsoft, one of a handful of U.S. companies with top AAA credit ratings, sold a record $10.8 billion of bonds Monday. The 40-year portion of the offering pays an annual interest rate of 4 percent. The Redmond, Washington-based company had $6.4 billion of cash and cash-like securities on its books as of year end.

And Apple, which had a whopping $19.5 billion of cash stashed away at the end of December, is back in the bond market for the second time this month. The iPhone creator raised $6.5 billion in an offering last week and is now heading to Switzerland to sell at least 1 billion Swiss francs ($1.1 billion) in its debut offering in that nation.

Cheap Debt

With the Swiss central bank cutting benchmark interest rates below zero, bond buyers are literally paying for the privilege to park their money in the country’s government debt for as long as a decade.

“I wouldn’t be surprised if Microsoft follows suit with the Apple situation, because why wouldn’t you?” Lurie said. “If you can get such cheap debt in the U.S., imagine what you can get in Switzerland.”

The party in bonds seems like a win-win for everyone -- for now, at least. Buyers of Microsoft’s $10.8 billion bond sale Monday reaped a $32.7 million reward just in the first few hours after the sale as the debt’s market value climbed.

So, what’s the problem?

Well, it’s always a little scary when everyone piles into a trade that already seemed crowded. Yields on U.S. investment- grade corporate bonds have fallen to 3.1 percent, compared with 4.7 percent on average over the past decade, according to Bank of America Merrill Lynch index data.

Buying top-rated bonds isn’t a guaranteed payday either. These notes are more sensitive to moves in benchmark government yields, a potential liability as the Federal Reserve debates raising interest rates this year.

But who can blame companies for grabbing the cash?

Central banks across the globe are handing out lottery tickets in the bond market.

To contact the reporter on this story: Lisa Abramowicz in New York at labramowicz@bloomberg.net To contact the editors responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net Caroline Salas Gage

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