Nov. 9 (Bloomberg) -- Cisco Systems Inc., the world’s largest maker of networking equipment, sold $5 billion of notes in its third debt offering since going public in 1990, according to data compiled by Bloomberg.

The issue consists of $500 million of 5-year notes, $2.5 billion of 10-year securities and $2 billion of 30-year bonds, Bloomberg data show. The debt is rated A1 by Moody’s Investors Service and is expected to receive an A+ from Standard & Poor’s.

Cisco has bought about 130 businesses in its 25-year history, using them to enter new markets, such as cable set-top boxes and home wireless routers. Chief Executive Officer John Chambers said last week the company will “aggressively invest” to enter new markets with acquisitions and with product development.

“While Cisco has a strong net cash position, much of its cash is offshore,” said Jeff Evenson, a senior analyst with Sanford C. Bernstein & Co. in New York. Cisco uses debt issuance “to sustain buybacks and to complete U.S.-based acquisitions such as Starent Network Corp.,” he said in an e-mail.

Cisco last week reported $35.4 billion in cash and cash equivalents as of Oct. 24, the end of its first quarter. Most of those funds are overseas, Cisco said. The San Jose, California- based company said it had $4.7 billion in the U.S., compared with $5.9 billion at the end of the previous quarter.

The 5-year notes priced to yield 2.955 percent, or 67 basis points more than similar-maturity Treasuries, the 10-year securities pay 4.469 percent, or a 100 basis-point spread, and the 30-year bonds priced to pay 5.679 percent, or 130 basis points, Bloomberg data show.

Use of Proceeds

Proceeds will be used for general corporate purposes, which may include stock buybacks, repayment of debt and acquisitions, Cisco said today in a filing with the U.S. Securities and Exchange Commission.

John Earnhardt, a spokesman for Cisco, didn’t comment beyond what was included in the filing.

Bank of America Merrill Lynch, Barclays Plc, Credit Suisse Group AG, Deutsche Bank AG, HSBC Holdings Plc and JPMorgan Chase & Co. underwrote the transaction.

Cisco last sold debt in February, issuing $4 billion of 10- and 30-year bonds, Bloomberg data show.

The sale was split between $2 billion of 4.95 percent, 10- year notes that priced to yield 200 basis points more than Treasuries of similar maturity, and $2 billion of 5.9 percent, 30-year bonds that priced at a spread of 225 basis points, according to Bloomberg data. A basis point is 0.01 percentage point.

Cisco sold bonds for the first time in February 2006, issuing $6.5 billion of fixed- and floating-rate debt to finance its acquisition Scientific-Atlanta, a maker of television set- top boxes.

To contact the reporter on this story: Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net

Last Updated: November 9, 2009 17:32 EST