My last days as a Financial Advisor were spent working with new Cisco Systems employees, who came to the company by way of a buyout. My initial job was to educate the newest team members about their new found wealth. Sometimes it came in the form of stock, sometimes cash and sometimes a combination of both. I would explain to them about what the buyout meant for them and then go over a financial plan with them. Some employees suddenly found themselves to be instant millionaires and had no idea how to deal with it.
Cisco systems uses acquisitions, over 100 of them in their 25 year history, to expand into different markets, acquire the latest technology, and to gain access into the brightest minds in the field, both domestic and abroad. One of the main ways Cisco (world’s largest maker of networking equipment) is able to finance these buyout is through the issuance of corporate bonds.
Cisco Systems will be selling 5 billion in notes in its third such offering. The deal will include 500 million of 5 year notes, 2.5 billion in ten year securities and 2 billion of 30 year bonds. They will be issuing the 5 year notes 67 basis points about similar treasuries, 100 basis points (one percent) about ten year notes and 130 basis points about the 30 year bond.
Some of the proceeds will be used for more acquisitions, company stock buybacks, and repayment of old debt.
The Underwriters are as follows: Bank of America Merrill Lynch, Barclays, Credit Suisse, and Deutsche Bank.
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