Intel Announces Pricing of Senior Notes Offering

[btarunr]

Intel Corporation today announced the pricing of four series of senior unsecured notes for an aggregate principal amount of $6.0 billion pursuant to an effective shelf registration statement previously filed with the Securities and Exchange Commission.

Of these notes, $3.0 billion will mature on Dec. 15, 2017 and will bear interest at an annual rate of 1.35%, $1.5 billion will mature on Dec. 15, 2022 and will bear interest at an annual rate of 2.70%, $750 million will mature on Dec. 15, 2032 and will bear interest at an annual rate of 4.0%, and $750 million will mature on Dec. 15, 2042 and will bear interest at an annual rate of 4.25%. The notes were offered to the public at a price of 99.894% of par in the case of the 2017 notes, 99.573% of par in the case of the 2022 notes, 99.115% of par in the case of the 2032 notes and 99.747% of par in the case of the 2042 notes. The offering is expected to close on Dec. 11, 2012, subject to customary closing conditions.

Intel intends to use the net proceeds from the offering for general corporate purposes and to repurchase shares of its common stock under the company’s existing share repurchase authorization.

J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated are acting as joint book-running managers for the offering.

This news release shall not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. The offering of securities may be made only by means of a prospectus supplement and accompanying prospectus. Copies of the prospectus supplement and the accompanying prospectus can be obtained from:

• J.P. Morgan Securities LLC
  383 Madison Avenue, 3rd Floor New York, New York 10179
  Attention: High Grade Syndicate Desk
  Call collect: 1-212-834-4533
• Merrill Lynch, Pierce, Fenner & Smith
  Incorporated 222 Broadway, 11th Floor New York, New York 10038
  Attention: Prospectus Department
  E-mail: dg.prospectus_requests@baml.com
  Toll-free: 1-800-294-1322

[Fourstaff]

Probably taking advantage of cheap credit right now, since that they are swimming with money.

[m1dg3t]

Run! Run as fast as you can

[The Von Matrices]

Originally Posted by btarunr

The notes were offered to the public at a price of 99.894% of par in the case of the 2017 notes, 99.573% of par in the case of the 2022 notes, 99.115% of par in the case of the 2032 notes and 99.747% of par in the case of the 2042 notes.

I'm not an expert at finance, so could someone explain to me why the 2042 notes would cost more than the 2032 notes?

[Fourstaff]

Originally Posted by The Von Matrices

I'm not an expert at finance, so could someone explain to me why the 2042 notes would cost more than the 2032 notes?

Because the chances of Intel going bust between now and 2042 is higher than between now and 2032.

[The Von Matrices]

Originally Posted by Fourstaff

Because the chances of Intel going bust between now and 2042 is higher than between now and 2032.

I think you have it confused - you would want the notes to be cheaper (for the same amount of money when matured) if there was more risk. But according to the original post the 2042 notes have a higher % of par than the 2032 notes. That means they're more expensive.

[Fourstaff]

Originally Posted by The Von Matrices

I think you have it confused - you would want the notes to be cheaper (for the same amount of money when matured) if there was more risk. But according to the original post the 2042 notes have a higher % of par than the 2032 notes. That means they're more expensive.

Supply and demand, it appears that people are willing to trade 0.632% for extra 10 years of interest. Usually not the case, but it illustrates the hunger for investment grade long term interest in this convoluted world right now.