Finnish handset maker Nokia, which is selling its devices and services business to Microsoft, will borrow $1.97 billion from the U.S. software giant to pay off loans taken to acquire the stake held by Siemens in their joint venture NSN.

In connection with the deal, Microsoft had agreed to make 1.5 billion euro of financing available to Nokia in the form of three tranches of 500 million euro ($658.77 million) convertible bonds.

The mobile phone maker has decided to draw down all the financing, and will issue three tranches of senior unsecured convertible bonds, it said in a statement.

“Nokia intends to use the proceeds of the offering to prepay financing raised for the acquisition of the shares in NSN, which was completed in August 2013, and for general corporate purposes,” the company said on Friday. Microsoft earlier this week agreed to acquire a major part of the devices and services business of Nokia and licence its patents for about $7.2 billion. Nokia will keep its telecom network equipment arm NSN, mapping and location services (HERE), its CTO office and its patent portfolio.

In July, Nokia agreed to buy German engineering giant Siemens’ 50 per cent stake in their mobile broadband joint venture NSN for 1.7 billion euro ($2.2 billion). The firm was renamed Nokia Systems and Networks (NSN). The bonds are expected to be issued on or about September 23, Nokia said.— PTI