My friend from MA called, he told me about INTC plan to sell bonds & buy back stock. He couldn't understand why at first, since they have Billions of cash on hand.
Then it hit him, their cash is overseas, if they brought it back it would cost them 35% in taxes. So they can use the bond money & it will only cost them a fraction...
Amazing. clo
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.
Read more: Intel Selling Long Bonds (INTC, MSFT) - 24/7 Wall St. http://247wallst.com/2009/07/20/intel-selling-long-bonds-intc-msft/#ixzz1XyQUboyw
DO SOMETHING!
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