AOL to sell $1.25 billion in debt notes

America Online plans to issue $1.25 billion in debt.

America Online plans to issue $1.25 billion in debt.

After market close Monday, the online company announced plans to offer $1.25 billion in 20-year, zero coupon convertible notes. AOL filed a shelf registration with federal regulators earlier this year covering up to $5 billion of securities. A separate prospectus must be filed for the specific offering announced Monday.

AOL had about $341 million of debt in the form of long-term notes at the end of the September quarter.

Other prominent Internet companies that issued debt securities this year include and Cnet..

Also Monday, AOL announced a deal with Hewlett-Packard that incorporates HP's printing technology into the AOL network and includes a prominent place for an HP store on AOL's shopping site.

"This agreement represents tremendous opportunity from a business and branding standpoint for both HP and for AOL," said Antonio Perez, president of HP's consumer business and digital media divisions. "Through AOL, HP will significantly expand our consumer reach."

Shares of AOL fell 4 3/8 to 79 in Monday's regular trading session. HP stock rose 5/8 to 96.