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More on Intel's (INTC +2.3%) debt offering: Intel states in a prospectus it will offer a mixture...

More on Intel's (INTC +2.3%) debt offering: Intel states in a prospectus it will offer a mixture of 5, 10, 20, and 30-year notes. To no one's surprise, the yields Intel are offering are pretty low: they range from 80-150 bps above what treasuries of similar maturity are yielding. Moody's rates the debt A1, and S&P A+.
Comments (9)
  • Lake Investor
    , contributor
    Comments (198) | Send Message
     
    I like that they are staggering maturities and taking advantage of some long-term financing. The US Government should do the same. I think they should use the proceeds of the maturities at ten years or shorter to retire shares if they can do so at or nearly current stock prices.
    4 Dec 2012, 05:11 PM Reply Like
  • Ashraf Eassa
    , contributor
    Comments (8817) | Send Message
     
    That's what the debt offering is for - buybacks.
    4 Dec 2012, 05:13 PM Reply Like
  • batitude
    , contributor
    Comments (118) | Send Message
     
    This is absolutely using your borrowing power wisely - INTC is more stable than the government, so it should be a discount to treasuries!
    4 Dec 2012, 06:08 PM Reply Like
  • Julius Ferraro
    , contributor
    Comments (495) | Send Message
     
    Its an amazing deal. Sell bonds under the dividend yield to buy back stock. Less shareholders to pay. Every company should do this
    4 Dec 2012, 06:34 PM Reply Like
  • k2caliguy
    , contributor
    Comments (59) | Send Message
     
    Go Intel, bond buyers are crazy.

     

    I buy a $1000 bond at 3% for a 30 year non-callable, annual payments. $900 of interest.

     

    I wait 5 years and then buy a 25 year bond non-callable at 5%. I make an extra $350.
    4 Dec 2012, 07:01 PM Reply Like
  • Micah
    , contributor
    Comments (462) | Send Message
     
    Love this move. Great capital allocation strategy. Something that is lacking at Apple in my opinion.
    4 Dec 2012, 09:07 PM Reply Like
  • jdgrego1
    , contributor
    Comments (19) | Send Message
     
    and then from an investor standpoint, why not buy the stock and get the greater dividend from owning the stock as well as any future upside in stock value.... versus buying the notes?
    5 Dec 2012, 12:15 AM Reply Like
  • westcoastinvests
    , contributor
    Comments (46) | Send Message
     
    And another INTC downgrade to get the day started, this time its Raymond James
    5 Dec 2012, 09:32 AM Reply Like
  • dncablao1
    , contributor
    Comments (4) | Send Message
     
    Raymond James downgrade gives them a chance to buy INTC on the cheap.

     

    Legitimate move to raise $6B to buy back shares. Interest rate on bond sale between 1.35% - 4.25% which is lower than current dividend yield of 4.5%. Plus, interest expense from bond can be written off for taxes purposes. Stock trading at near term support levels
    5 Dec 2012, 03:16 PM Reply Like
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