Intel Corp. is planning to sell $6 billion of bonds in four parts to repurchase stock that’s trading at about the lowest level in 16 months.
The world’s largest semiconductor maker, whose attempt with Microsoft Corp. to combat Apple Inc.’s iPad in the $63.2 billion tablet market is getting off to a slow start, may issue $3 billion of five- year securities to yield 75 basis points more than similar-maturity Treasuries, $1.5 billion of 10-year bonds at a relative yield of 115 basis points, $750 million of 20-year securities at 130 basis points and $750 million of 30-year debt at 150, according to a person familiar with the offering.
The 20-year portion was added after the deal was marketed earlier today. Proceeds will fund general corporate purposes and previously announced stock buybacks, Santa Clara, California-based Intel said today in a regulatory filing.
The company’s $1.5 billion of 4.8 percent securities sold last year and maturing in October 2041 traded at 112 cents on the dollar on Nov. 30 to yield 4.09 percent with a 132 basis-point spread over similar-maturity Treasuries, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
The new bonds will be rated A1 by Moody’s Investors Service, the ratings company said in a statement, and A+ by Standard & Poor’s, according to the person familiar with the deal, who asked not to be identified, citing lack of authorization to speak publicly.
Shares of Intel have lost 15 percent including reinvested dividends this year and fell to $19.36 on Nov. 21, the lowest closing price since August 2011. The stock rose 1.3 percent to $19.79 at 1:11 p.m. in New York. Benchmark offerings are typically at least $500 million.