Cisco fattens cash reserve
Cisco announced the pricing for its pending sale of senior unsecured notes; the aggregate principal amount will total $4 billion. The offering is expected to close on Feb. 17.
Cisco said it intends to use the net proceeds from this offering for general corporate purposes, and to repay $500 million in aggregate principal amount of its floating-rate notes due 2009.
That the move may be preparatory for more acquisitions is hardly a speculative stretch, given that Cisco is defined by its history of growth through acquisition. The company has made it clear that it means to expand in the home networking area; The New York Times has one such report (available here).
Of the notes up for sale, $2 billion will mature in February 2019 and will bear interest at an annual rate of 4.95 percent, and $2 billion will mature in February 2039 and will bear interest at an annual rate of 5.9 percent. The 4.95 percent notes due February 2019 and the 5.9 percent notes due February 2039 were priced to yield 4.979 percent and 5.916 percent, respectively.
Separately, Cisco and Tata Consultancy Services (TCS) of India have formed a strategic alliance to co-develop and deliver information technology (IT) service solutions, specifically aimed at next-generation data centers based on Cisco’s Data Centre 3.0 technologies.
The companies also announced the formation of a Cisco Technology Lab at the TCS campus in Chennai, India.