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Google to Move Into the Bond Market With $3 Billion Sale

7:04 pm on May 16, 2011 (gmt 0)

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Google to Move Into the Bond Market With $3 Billion Sale [bloomberg.com]
Google Inc. (GOOG), whose shares have dropped 9 percent this year, is making its first foray into the bond market with a planned $3 billion sale to pay back short- term borrowings.

“People aren’t going to do very much credit analysis, they’re going to look at the balance sheet, and look at the cash, and say ‘This is ridiculous’ and put their orders in, and probably big orders,” said Lon Erickson, a money manager at Thornburg Investment Management Inc. in Santa Fe, New Mexico, who oversees $9 billion. “It will be scooped up like nobody’s business.”

Google, with total cash and marketable securities of $35 billion at yearend, according a regulatory filing, is tapping the corporate bond market as investment-grade borrowing costs tumble to about the lowest since November. Chief Executive Officer Larry Page, who replaced Eric Schmidt last month, is ramping up spending to expand in mobile and video advertising even as U.S. and European authorities mount investigations into the company’s business practices.

The world's biggest Internet-search company may sell three-, five- and 10-year notes today, said a person with knowledge of the transaction.
5:20 am on May 17, 2011 (gmt 0)

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I don't get it. Why A company with $35 billion total cash and marketable securities want to issue bonds?

To pay back short-term borrowings? What happened to the cash?