Freescale bond sale boosted by HCA-Blackstone

By Walden Siew

NEW YORK (Reuters) - Freescale Semiconductor Inc.'s FSL.N $5.95 billion bond sale, the biggest to finance a buyout since 1989, is getting a boost from increasing appetite for high-yield bonds, a Blackstone Group executive said on Tuesday.

The Austin, Texas-based chip maker is selling debt to help finance its $17.6 billion takeover by a Blackstone Group-led consortium. Investor demand has been strong in the wake of HCA Inc.'s HCA.N $5.7 billion sale last week, according to Hamilton "Tony" James, president of the Blackstone Group.

"It feels good," said James at the Reuters Investment Banking Summit. "HCA trading up the way it did helped the perception of high-yield deals a lot."

James also views technology as a growing industry and said Blackstone has added staff to anticipate that growth, he said.

Even investment-grade technology firms, which typically have not tapped the debt markets, have had some of the biggest sales this year. Internet equipment maker Cisco Systems Inc. (CSCO.O: Quote, Profile, Research, Stock Buzz) issued $6.5 billion and software giant Oracle Corp. (ORCL.O: Quote, Profile, Research, Stock Buzz) sold $5.75 billion of debt to lead technology and telecom company sales.

James also said he was concerned about companies bypassing the U.S. market to hold initial public offerings in other markets. Blackstone and three other buyout firms agreed to buy Freescale this year.

"It wouldn't surprise me if we listed Freescale in Hong Kong," James said.

Freescale's sale is being marketed to investors in Los Angeles, San Francisco, Chicago and New York leading up to expected pricing on Thursday.  Continued...