Office 365 (iOS 7) - Format a Message
This document will provide step-by-step instructions on how to format the body of a message.
Double tap the word(s) you would like to format. When the Menu pops up, click on the Arrow located towards the right side of the menu to view the menu's second page.
Click on the B/I/U option, which will open the Formatting menu.
Select the formatting option you want, and repeat these steps if you want to add other formatting options, or remove any existing styling.