Intel Corporation (NASDAQ: INTC) is not a company you think of needing cash. Yet, after the close, the chip and processor giant announced its intention to sell a $1.5 billion principal amount of junior subordinated convertible debentures. This debt offering isn’t a short-term financing at all. It is going to be a 30-year issuance due in 2039.
These will be Rule 144A notes, so they will oonly sold only to qualified institutions. The rate, conversion ratio and other terms will be set by negotiated terms. Intel has also granted to the initial purchasers the right to purchase up to an additional $250 million for overallotments. If this sounds familiar, it is much like the recent bond offering from Microsoft Corporation (NASDAQ: MSFT).
Intel intends to use a majority of the proceeds to purchase shares of its common stock concurrently with pricing of the debentures, with the remainder of the proceeds for general corporate purposes.
Shares of Intel are down 0.75% at $18.76 after closing up 0.6% at $18.90 in regular trading.
JON C. OGG
JULY 20, 2009
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