While tech companies have hoarded hundreds of billions of dollars overseas, Qualcomm's (QCOM) - Get Report $47 billion purchase of NXP Semiconductors (NXPI) - Get Report is one of the few instances in which those distant funds were put to good use.
"It's a fantastic use of offshore cash, versus earning maybe 10 basis points on safe investments," Moody's analyst Richard Lane said.
"It's one of the few examples where we've seen tech companies be able to do that, in large part because there are so few substantial non-U.S. tech companies.
Qualcomm had nearly $29 billion in overseas cash in June, according to Moody's.
During a Thursday call with investors, Qualcomm CFO George Davis touted the strategic use of the funds.
"Our use of offshore cash enhances transaction efficiencies, unlocks value, and significantly improves our return on invested capital," Davis said. "We plan to use future offshore cash to service the transaction financing, enabling us to reduce leverage quickly and we remain committed to a strong investment- grade rating."
Overseas cash hoards are a hallmark of Silicon Valley.
Apple (AAPL) - Get Report had the biggest stockpile, with $214.9 billion in cash held outside of the U.S. at mid-year. Microsoft (MSFT) - Get Report was next, with $108.9 billion in cash overseas. Coming in under the $100 billion mark were Cisco (CSCO) - Get Report ($59.9 billion), Oracle (ORCL) - Get Report ($8.2 billion) and Alphabet (GOOGL) - Get Report ($47.8 billion). Including chipmakers, Intel (INTC) - Get Report had about $15 billion in offshore cash.
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Silicon Valley's overseas cash holdings came into focus this summer, when the European Union told Ireland to slap Apple with a $14.5 billion bill for back taxes.
Microsoft has used overseas cash to fund acquisitions. The Seattle tech group paid $7.2 billion for the handset and services business of Finnish communications technology group Nokia in 2014. Microsoft would have been better off putting the money in a safe, low-return investment. The company took a $7.6 billion write down on the business last year.
Last year, Microsoft tapped overseas cash to buy Mojang, the Swedish developer of the Minecraft game, for $2.5 billion.
"Aside from that," Moody's analyst Lane said, "there are very few companies that have been able to use their offshore cash in this respect."
Qualcomm isn't funding all of the purchase with overseas cash. The company will issue $11 billion in debt to finance the deal. Moody's put the San Diego chipmaker on review for a downgrade.
"As a result of that debt raise, their leverage will increase a fair bit from about 1.5 times adjust debt to Ebitda to a little under 3 times, we believe,' Lane said.
Davis said Qualcomm will pay down debt to its level before the transaction within two years of the deal's close.