Intel Sells $2.75 Billion of Bonds to Refinance 2016 Debt

Intel Corp. sold $2.75 billion of bonds on Thursday to refinance debt due this year and a portion of notes maturing in 2017.

The world’s biggest chipmaker issued debt three parts, according to data compiled by Bloomberg. The longest portion was $1.25 billion of 30-year notes yielding 1.55 percentage points above comparable government debt. That’s down from an initial offer of 1.7 percentage points, according to a person familiar with the matter who asked not to be identified because the information isn’t public. Bank of America Corp. and JPMorgan Chase & Co. managed the sale.

Credisights Inc. analysts Erin Lyons and Peter Boozan maintained their equivalent of a hold recommendation on Intel’s debt in a client note reviewing the offering on Thursday. They recommended that investors looking for stable A-rated core holdings buy the bonds.

“Intel is one of the best-run semiconductor companies, and we like that management has maintained a conservative financial profile,” they wrote. “We believe the bonds are priced fairly and we do not expect to see meaningful price appreciation.”

S&P Global Ratings gave the bonds an A+ grade, according to a statement on Thursday.

Busy Week

Intel is the latest U.S. blue-chip company to offer notes in what’s poised to be second-busiest week for issuance this year. In its last multibillion-dollar deal, Intel sold $7 billion of bonds in July to finance part of its $16.7 billion takeover of Altera Corp. The company plans to repay its $1.5 billion of 1.95 percent notes due in October and a portion of the $3 billion of 1.35 percent bonds due next year.

Investment-grade companies have sold more than $49 billion worth of bonds so far this week as they take advantage of low borrowing costs after posting earnings for the quarter ended March 31. Companies are also front-loading issuance before the summer slowdown, according to Ben Emons, a money manager at Leader Capital Corp. in Los Angeles.

“I think they take the window of opportunity right here to say, ‘Now it’s OK, liquidity’s back, so let’s just issue as much as we can and sell into the demand,’ Emons said. “By July, things will get worse.”

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