Mumbai: Microsoft Corporation, the world's largest software maker, is likely to go for a debt issue to finance the proposed $44.6 billion take-over of Yahoo! Inc, a top Microsoft official told an investors conference today.

Redmond, Washington-based Microsoft will sell bonds, for the first time, to finance part of the $31 a share cash-and-stock offer it has made for Yahoo, chief financial officer Chris Liddell told investors in New York.

Liddell said Microsoft wanted to sweeten the offer to make it attractive as it takes on Google Inc. in the internet advertising market. Microsoft had $21.1 billion in cash and short-term investments as of December 31.

Microsoft had a cash pile of at $60.6 billion in the fiscal year that ended June 30, 2004, before it announced an additional $3-a- share onetime dividend and a $30 billion four-year share repurchase plan.

By May 2006, and post buy-back, it had almost $35 billion in cash still on the books.

Microsoft then announced a $20 billion regular repurchase programme over five years combined with a onetime $20 billion tender offer for its shares. The tender offer was undersubscribed, so Microsoft boosted the regular buyback.

Liddell, however, did not say how much the top-rated company is likely to borrow.

A Microsoft bond is likely to receive the highest rating, according to analysts.

Microsoft took on $80 million in debt from AQuantive Inc. when it bought the internet advertising company for $6 billion in August last year.

Yahoo! Inc., meanwhile, is expected seek help from rivals to thwart the $44.6 billion takeover attempt by Microsoft.

Reports quoting analysts said Yahoo may solicit bids from Google Inc, Rupert Murdoch's News Corp. and Comcast Corp or may try to form a partnership with a social-networking site.

Microsoft shares fell 26 cents to $30.19 in evening trade on New York's Nasdaq Stock Market. Its shares fell the most - 6.6 per cent - on February 1, the day it announced an offer for Yahoo

Yahoo was trading at $19.18 before the offer. The shares rose 48 per cent in Nasdaq Stock Market trading on February 1 and advanced 95 cents to $29.33 at 4 p.m. New York time today. Microsoft fell 26 cents to $30.19, while Google dropped $20.47 to $495.43.