Intel (NASDAQ: INTC ) led the billion-dollar borrowers brigade with $6 billion spread over five-, 10-, 20-, and 30-year paper. The money's being used to fund a share buyback. Borrowing to buy shares may not seem like a smart move at first glance, but let's crunch some numbers.
•Interest on the new debt: about $143 million per year
•Dividend payout on $6 billion of Intel stock: about $268 million per year.
This deal nets Intel about $125 million a year in cash flow. Factor in taxes and consider future dividend increases, and the savings will get even bigger.