New York - Oracle is planning a benchmark bond issue in seven parts to help finance the $5.3 billion purchase of Micros Systems announced last week.
The sale will include three- and five-year floating-rate notes, as well as fixed-rate five-, seven-, 10-, 20-, and 30- year bonds, according to a regulatory filing.
Proceeds will be used for general corporate purposes, which may include stock repurchases, dividend payments, refinancing of debt and acquisitions including the company’s pending purchase of Micros, according to the filing.
Oracle agreed to buy Micros on June 23.
The Redwood City, California-based software maker has announced plans this year to acquire five companies including Micros, according to data compiled by Bloomberg.
The bond sale would be Oracle’s first in almost a year.
Last July the company issued $3 billion of securities in a three-part sale, Bloomberg data show.
That offering included $1 billion of 3.6 percent, 10-year notes that yielded 110 basis points more than similar-maturity Treasuries.
The bonds traded at 102.8 cents on the dollar to yield 3.27 percent at 9:30 a.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
The 10-year securities Oracle is planning to offer as soon as today may yield about 100 to 105 basis points more than government bonds, according to a person with knowledge of the offering who asked not to be identified, citing lack of authorisation to speak publicly.
Based on trading prices of Oracle’s bonds in the secondary market, its new 10-year issue may pay a spread of about 78 basis points, according to Bloomberg New Issue Analytics.
A basis point is 0.01 percentage point.
Benchmark sales are typically at least $500 million. - Bloomberg News