Intel offers debt, shares jump on on stock buyback hopes
SAN FRANCISCO Dec 4 (Reuters) - Intel on Tuesday launched a $6 billion debt sale to fund share buybacks and other activities, and the top chipmaker's stock rose more than 2 percent.
Intel was offering the bonds in a range of maturities from five years to 30 years, according to IFR, a Thomson Reuters unit.
Intel said in a filing it plans to use proceeds of the debt sale for general corporate purposes and for stock buybacks under its existing share authorization.
"We believe the action should likely prove prudent given low debt borrowing costs," RBC analyst Doug Freedman said of the debt offer in a note to clients. "In our view the raise will likely support increased buybacks."
Intel's stock has dropped 18 percent over the past year as investors worried about slow PC sales and the company's failure to expand into mobile gadgets.
It's shares were up 2.3 percent at $20.00 on Tuesday.
"The cost of money is relatively inexpensive and we have an excellent credit rating. It's sound financial planning," said Intel spokesman Chuck Mulloy.