Motorola refinances debt

SCHAUMBURG -- Motorola raised $1.4 billion in its first bond sale in three years.

The sale consisted of $400 million of 5.375 percent, five- year notes; $400 million of 6 percent, 10-year securities; and $600 million of 6.625 percent, 30-year bonds, according to data compiled by Bloomberg. Motorola had sought to raise $1 billion.

Proceeds will be used to repay retiring debt.

The 5.375 percent notes were offered at a discount to yield 135 basis points more than U.S. Treasuries of similar maturity, Bloomberg data show. The 6 percent securities were priced to yield a premium of 165 basis points, while the 6.625 percent bonds were sold with a spread of 200 basis points, Bloomberg data show.

The securities included a so-called poison put that would allow investors to sell the bonds back at 101 cents on the dollar if there is a change of control at Schaumburg-based Motorola, the company said in a regulatory filing Monday.

Moody's Investors Service rated the securities Baa1, its third-lowest level of investment grade, while Standard & Poor's ranked them a step higher at A-. Fitch Ratings assigned a BBB+ rating.

Motorola last tapped the corporate bond market in August 2004, when it sold $1.2 billion of 4.608 percent three-year notes, which are due on Nov. 16.

Motorola last week posted its first profit in three quarters and gave a forecast that surpassed analysts' estimates after cutting more than 5,000 jobs and unveiling a new version of its best-selling Razr phone.