Cisco Systems sells $5 billion worth of debt

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DES MOINES, Iowa -Cisco Systems Inc., the world's largest maker of computer networking equipment, said Monday it will sell three series of senior unsecured notes worth a total of $5 billion.

The offering is expected to close on Nov. 17.

Of these notes, $500 million will mature in November 2014 and will bear interest at an annual rate of 2.9 percent, $2.5 billion will mature in January 2020 and will bear interest at an annual rate of 4.45 percent, and $2 billion will mature in January 2040 and will bear interest at an annual rate of 5.5 percent.

Cisco intends to use the net proceeds from this offering for general corporate purposes.

The company is coming out of the recession with the largest cash balance of any technology company, at $35 billion at the end of July. But it also is spending some of that cash buying up other firms.

Betting on the growing popularity of data-hungry phones like the iPhone, Cisco last month agreed to pay $2.9 billion for Starent Networks Corp., a maker of equipment for wireless carriers. It also said it would pay $3 billion for Tandberg ASA, a leading maker of videoconferencing equipment.

Cisco shares rose 17 cents to close earlier at $23.99, not far off the stock's 52-week high of $24.83.

2009-11-09 20:11:23