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Bond Market News
Intel Downgraded to BBB+ by Fitch
July 2, 2024
Intel and its senior unsecured debt were downgraded by a notch to BBB+ from A-. The downgrade reflects its weakening free cashflow profile due to the capital investment super-cycle over the next several years. Given Intel’s commitment to regain process technology leadership and build out its foundry services business, it has a long-term target of 25% capital intensity, which Fitch believes is in-line with what the current technology leader, TSMC, spends on leading edge. However, Fitch believes execution risk remains significant for Intel and that missteps could result in further negative rating actions.
Intel’s bonds traded stable with its 4.875% 2028s at 99.5, yielding 5.03%.
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