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Intel stumps up $7bn of bonds to finance Altera buy

The bonds may be sold in four parts.

By CBR Staff Writer

Intel is planning to sell $7bn of bonds to finance its $16.7bn acquisition of Altera.

The bonds may be sold in four parts ranging in maturities from five to 30 years. The debt is being arranged by Bank of America Merrill Lynch and Wells Fargo.

Bloomberg reported that the longest portion of the agreement, $2bn in 30-year bonds, may yield 1.85 percentage points more than same-maturity Treasury bond.

Intel chief financial officer Stacy Smith recently said that the company planned to issue $7bn to $9bn of debt to finance its Altera acquisition.

The latest deal was smaller than initially expected by market participants, who have been estimating an agreement of $8bn to $10bn in size.

As part of its purchase, Intel will integrate its products and manufacturing process with Altera’s field-programmable gate array (FPGA) technology.

The combination is anticipated to allow new classes of products that address customer requirements in the data centre and Internet of Things market segments.

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Altera’s FPGA products will be offered with Intel Xeon processors as highly customised, integrated products.

The companies also expect to improve Altera’s products via design and manufacturing enhancements resulting from Intel’s device manufacturing model.

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