Six series of unsecured notes amounting in a net principal amount of roughly $7 billion was recently disclosed by network equipment company, Cisco Systems, Inc. (NASDAQ:CSCO). Subject to customary closing conditions, it is set to close on February 29.
The unsecured notes are set to mature in 2018, 2019, 2021, 2023, and 2026.
In February, 2018, $1 billion of the notes will mature bearing interest at a floating rate tantamount to three-month LIBOR including 60 basis points and $1.25 billion will mature bearing an annual interest rate of 1.400%. In February, 2019, $1 billion of the notes will mature bearing an annual interest rate of 1.600%. In February, 2021, $2.50 billion of the notes will mature bearing an annual interest rate of 2.200%. In February, 2023, $500 million of the notes will mature bearing an annual interest rate of 2.600%. Finally, in February, 2026, the last stretch of $750 million will mature bearing an annual interest rate of 2.950%.
The proceeds from the unsecured notes will be used by Cisco to repurchase common stock, settle debts, repay previously issued unsecured notes, investments, capital expenditures, acquisitions, cash dividends, funding of its subsidiaries, and other general corporate purposes.
Latest Quarterly Report
Cisco released its earnings report for the second quarter of the fiscal year 2016 last February 10. The company’s revenue surged 2% year-over-year.
The biggest gainer in the company is its Service Provider (SP) Video, which rallied 37% year-over-year and brought $569 million into Cisco. The Other Products segment grew 31% with a total revenue of $77 million, the Security segment gained 11% with a total revenue of $462 million, the NGN Routing segment inched up 5% with a total revenue of $1.85 billion, the Switching segment declined 4% YoY with a total revenue of $3.48 billion, and the Collaboration, Data Center, and Service segments each declined 3% with a total revenue of $1.02 billion, $822 million, and $2.94 billion respectively.
Currently, Cisco’s growth can be attributed to four key areas, including the redefinition of next-generation networking, the refining of its Security business, the use of M&A to augment internal innovation, and further movement of portfolio delivered in both cloud-based SaaS and on-premise models.