After buying Starent and Tandberg for $2.9 and $3 billion respectively, Cisco is beefing up its cash pile with a $5 billion debt offering that will close on November 17th.
Even considering the company’s recent deals, let’s not forget that Cisco reported a massive $35 billion cash and investment back in July.
Thus this debt issue is clearly war chest building, and they’re getting their money cheap thanks to the low interest rate environment.
DealBook: Of these notes, $500 million will mature in November 2014 and will bear interest at an annual rate of 2.9 per cent, $2.5 billion will mature in January 2020 and will bear interest at an annual rate of 4.45 per cent, and $2 billion will mature in January 2040 and will bear interest at an annual rate of 5.5 per cent, The Associated Press reported.
Cisco intends to use the net proceeds from this offering for general corporate purposes.