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Intel Corporation Message Board

  • alexander.dumbass alexander.dumbass Sep 15, 2011 12:17 PM Flag

    $5Bil notes $1.5b 5y 1.95% - $2b 30y 4.8%

    Intel was able to borrow $1.5bil at 1.95% coupon. They can buy back 1.5% of their stock and save 2% in dividend.

    by Timothy Sifert NEW YORK, Sept 15 (IFR) - Intel Corp raised money in the investment grade bond market for the first time on Wednesday, putting it in line with recent first-time tech borrowers. The company ended up pricing one of the biggest deals of the year and taking home US$5bn. Not since Verizon's US$6.25bn, five-part bond offering hit the market on March 23 has a bond-market fundraising been larger than Intel's. Like Google , which priced an inaugural trade in May, Intel and other tech high-flyers sit on tremendous cash piles and don't really need the bond market's money. The senior debt fundraisings are about optimizing capital structures, establishing a credit curve and, for sure, borrowing while rates are low. Intel, for its part, generated some US$4bn in free cash flow in the second quarter alone. The chipmaker hit the market with an offering of bonds with maturities of five, 10 and 30 years, the same maturity composition used by Microsoft , when it first hit the bond market in May 2009. Microsoft, renowned for its tens of billions in cash on hand, also didn't need the money, though it's raised US$10.75bn from bond investors in three separate trades, the most recent in February this year. For Intel on Wednesday, whispers centred on the 10-year bond in the mid 100s. The five-year notes were heard about 25bp tight of that, and the 30-year bond was whispered at 20bp wide. Official guidance came out at Treasuries plus 115bp area on the fives and plus 140bp area on the 10s. The curve between the 10-year and 30-year turned out to be steeper than whispers predicted: the long bond was talked at plus 165bp area. The US$1.5bn tranche of five-year notes finished with a 1.95% coupon and priced to yield Treasuries plus 110bp. The US$2bn 3.30% tranche of 10-year notes finished at plus 135bp. And the US$1.5bn 4.80% 30-year bond printed at plus 160bp. "

 
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