Companies prefer to raise capital through stock when possible. Paying dividends is cheaper than paying interest. However, if the stock price is low, or there isn't a lot of confidence in the company, bonds may be the right choice. Bonds give the holder power as a debtor over the company, meaning if the company goes bankrupt, then the bondholders get money before the shareholders.

Also, sometimes companies release bonds with the option of converting them to shares. They do this because by converting the bonds to shares, they don't have to pay back the bondholder. However, they normally have to prove their stock is strong before most bondholders will convert.

The main difference I know is that selling shares over bonds costs more and takes costs more in fees and red tape.

Bonds are solid with a face value and an applied interest payment, depending on going interest rates at the time a bond can be sold at face value, a discount on face value, or a premium on face value. The actual cost related to selling them is not in reality any different then selling shares and is actually lower then selling stock. Although technically anyone can issue a bond, only large companies and governments can effectively issue bonds. The reason for that is fairly simple, bonds are basically unsecured debt, the yield (effective rate of return (based on interest rate and bond cost at purchase)) on a bond goes on a scale:

1. A major western federal government bond carries the lowest yield as they have the lowest risk.
2. Lower level governments carry the second lowest yield usually 1 to 2 % higher then their nation's federal bonds.
3. Major corporations from the same country can sell bonds with a yield another 1 to 6 % higher then their lower level government bonds depending on the company financial history.
4. Any other comany would carry even greater risk to investors thus their required yield to buy the bonds becomes to extreme to even try riasing money via this market.

Your answer

To very solid companies selling bonds is cheaper then shares that is why they would do it. But if they expect uncertainty in their financial future they prefer shares as dividends payments can be avoided interest payments cannot.