Bolaji Ojo EE Times (07/01/2009 9:30 AM EST)

Oracle Corp. said it will raise up to $4.5 billion in a new bond offering to investors as the enterprise management software company moves to shore up its capital base following a string of acquisitions.

The company said it will use the proceeds from the offering "for general corporate purposes, future acquisitions, including our proposed acquisition of Sun, stock repurchases and repayment of other indebtedness," according to a Securities and Exchange Commission filing.

Oracle has over the last years made numerous acquisitions to bolster its offerings and has been tapping the investment market to fund the purchases although it has also utilized available cash in many cases.

The company closed its recent quarter with $12.6 billion in cash and short-term investments, an increase of about $1.3 billion from the amount it had at the end of the preceding quarter. As at the end of the May fiscal quarter, Oracle had $9.2 billion in long-term debt, down about $1 billion from $10.2 billion in the February 28 ended quarter.

In April, Oracle announced it agreed to buy Sun Microsystems Inc. for approximately $7.4 billion, or $5.6 billion net of cash at Sun Micro. Other recent Oracle acquisitions include the purchase earlier this year of Relsys International Inc. for an undisclosed amount. The company had also purchased Siebel Systems and PeopleSoft in 2006 and 2005, respectively.

In its latest bond offering, Oracle plans to sell three sets of bonds valued each at $1.5 billion, $1.75 billion and $1.25 billion. The rates on the debts range from 3.75 percent for the notes due in 2014 to 5 percent for the ones due in 2019 and 6.125 percent for the notes that will mature in 2039.

Oracle said it reserves the rights to "redeem some or all of the notes at any time," as stated in its prospectus supplement.

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