Intel kicks off bond sale to help buy back Irish plant stake

Citigroup, JPMorgan Chase, Barclays, Bank of America and Deutsche Bank are said to be helping run the bond sale

Intel said on April 1 it would take on about $6.5bn (€5.6bn) in new debt to help repurchase a 49% stake in its Fab 34 joint venture in Leixlip. Picture Colin Keegan, Collins Dublin.

Intel has kicked off the sale of investment-grade debt to help finance a $14.2bn (€12.3bn) deal to retake full ownership of the semiconductor plant in Kildare.

Intel said on April 1 it would take on about $6.5bn (€5.6bn) in new debt to help repurchase a 49% stake in its Fab 34 joint venture in Leixlip. 

Apollo Global Management Inc. paid $11.2bn (€9.7bn) for the stake in 2024, providing cash that Intel said it needed for new production technology at the facility and others in the US.

The company is marketing bonds in five tranches, with maturities ranging from five to 40 years, according to a person familiar with the matter. 

Initial price talk for the longest-tenored note is for a spread of about 1.65 percentage points above Treasuries, the person added, asking not to be identified because they’re not authorised to speak publicly.

The chipmaker held fixed-income investor calls on Friday, a day after releasing a far-brighter-than-expected sales forecast that sent Intel shares to a record high. 

Its sales forecast shattered Wall Street expectations, boosting confidence that chief executive officer Lip-Bu Tan is making progress on a comeback plan that aims to position the company to benefit from the build-out of artificial intelligence computing.

Citigroup, JPMorgan Chase, Barclays, Bank of America and Deutsche Bank are helping run the bond sale, the person said.

Intel last sold dollar notes in February 2024, according to data compiled by Bloomberg. Its foundry joint venture with Brookfield Infrastructure raised nearly $12bn (€10.4bn) through three offerings in 2024 and 2025.

The debt raise follows a blow-out update from Intel, which sent its shares to record highs Friday. 

After lining up major investments in Intel last year, helping to strengthen the company’s balance sheet, Lip-Bu Tan is now delivering on a promise to improve operations. 

The company also got an infusion of cash through a novel agreement with the federal government, a White House-brokered deal that turned the US into one of the company’s biggest backers. 

Nvidia and SoftBank also made multibillion-dollar investments last year.

Bloomberg