Intel Raises $6 Billion In A Bond Sale To Buy Back The Stock

Posted Dec 5, 2012

Intel Corporation has sold $6 billion of bonds.  This is the largest denominated sales since Abbott Laboratories had raised $14.7 billion on November 5th.  This tops the company’s previous record of a $5 billion issue from September 2011, which was used to repurchase stock that is trading at around the lowest level in 16 months.

Intel “issued $3 billion of 1.35 percent, five-year securities to yield 75 basis points more than similar-maturity Treasuries, $1.5 billion of 2.7 percent, 10-year bonds at a relative yield of 115 basis points, and $750 million each of 4 percent, 20-year securities at 130 basis points and 4.25 percent of 30-year debt at 150,” according to Bloomberg.

The 20-year portion of the sale was added after the deal was marketed earlier today.  The proceeds from the bond sale will go towards general corporate purposes and stock buybacks.  The company’s $1.5 billion of 4.8% seucirites sold last year and is set to mature in October 2041.  It traded at 112 cents on the dollar on November 30th to yield 4.09% with a 132 basis-point spread over similar-maturity Treasuries according to the bond-price reporting system Trace.  The new bonds are rated A1 by Moody?s Investors Service and A+ by Standard & Poor?s.