Cisco (CSCO -0.1%) has filed a shelf registration for a debt offering whose proceeds the company plans to use to pay down $3.75B in debt maturing this year, and to finance its dividend (recently hiked) and buyback program (expanded by $15B in November).
Reuters reports Cisco is raising at least $7B. The networking giant is said to be offering floating rate notes with three maturities (18-month, 3-year, and 5-year), and fixed-rate notes with four maturities (3-year, 5-year-, 7-year, and 10-year). Informa's Ken Jacques states $17B worth of orders have been placed.
With demand for blue-chip corporate debt remaining strong, interest rates are bound to be low. Reuters states Cisco's 3-year fixed notes is set to carry only a 45bps premium to comparable Treasurys, and its 10-year fixed notes only a 105 bps premium.
Cisco had $47.1B in cash/investments as of Jan. 25 (much of it offshore), and $17.1B in debt.