Intel Corp shares jumped more than 2 percent on Tuesday as the top chipmaker sold $6 billion in bonds to fund stock buybacks and other business activities.<\/p>\n
Intel sold the bonds in a range of maturities from five years to 30 years, according to IFR, a Thomson Reuters unit.<\/p>\n
The Santa Clara, California-based chipmaker 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.<\/p>\n
“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.”<\/p>\n
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.<\/p>\n
In the September quarter, Intel spent $1.165 billion on stock buybacks, bringing its repurchases so far in 2012 to $3.765 billion.<\/p>\n
At the end of that quarter, Intel had another $6.3 billion available for share repurchases under its existing authorization.<\/p>\n
Some investors have pointed to Intel’s willingness to return cash to investors as a reason to own its stock. It paid $1.1 billion in dividends in the third quarter and its dividend yield stands at about 4.3 percent, according to Thomson Reuters data.<\/p>\n
Intel shares rose 2.19 percent on Tuesday to settle at $19.97.<\/p>\n
“The cost of money is relatively inexpensive and we have an excellent credit rating. It’s sound financial planning,” said Intel spokesman Chuck Mulloy.<\/p>\n
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