Hewlett-Packard Sells $4.6 Billion of Debt for Autonomy Purchase

Hewlett-Packard Co. (HPQ) sold $4.6 billion of bonds with yields hovering at about record lows to help pay for the proposed acquisition of Autonomy Corp.

The world’s largest maker of personal computers sold the debt in five parts with maturities from three to 30 years, according to data compiled by Bloomberg. The Palo Alto-based company extended a deadline for search-software company Autonomy’s shareholders to agree to the sale, Hewlett-Packard said today in a regulatory filing.

Sales of corporate bonds are rebounding, after falling in August to the lowest since May 2010, as investors gain confidence that companies can survive a slowing U.S. economy and Europe’s sovereign debt crisis. Yields on investment-grade corporate debt averaged 3.7 percent yesterday and touched 3.45 percent, the lowest in data extending to October 1986, on Aug. 4, according to the Bank of America Merrill Lynch U.S. Corporate Master Index.

The company sold $350 million of three-year floating-rate securities that pay 155 basis points more than the three-month London interbank offered rate, Bloomberg data show.

The PC maker also issued $750 million of 2.35 percent fixed-rate notes due in three-and-a-half years that yield 200 basis points more than similar maturity Treasuries, $1.3 billion of 3 percent, five-year debt that pays a 215 basis-point spread, $1 billion of 4.375 percent, 10-year notes that priced to yield 240 basis points more than the benchmark and $1.2 billion of 6 percent, 30-year bonds that pay a spread of 270 basis points, Bloomberg data show. A basis point is 0.01 percentage point.

Hewlett-Packard last sold bonds on May 25, when it issued $5 billion of notes in its largest-ever debt offering.

To contact the reporter on this story: Tim Catts in New York at tcatts1@bloomberg.net.

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net.

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