Question

How can I find out the bond yield for Home Depot, Altria, Home Depot, and Intel.

Answer 1

This report analyzes Intel Corporation's (Intel) (NASDAQ:INTC) senior unsecured 3.70% 2025 bond with original issuing amount of $2.25 billion, which is still outstanding as of this writing. Issued on June 22^nd, 2015, with a dated date of June 29^th, 2015, Intel's bond is callable starting on April 25^th, 2025. Considering Intel's financial performance, the bond's yield, and the comparable analysis against some of its peers, I would recommend a buy rating for Intel's 3.70% 2025 bond to risk averse investors.

The A+ rating from Standard & Poor's and A1 rating from Moody’s ratings communicate to potential investors that Intel has a strong capacity to pay its interest and principal. In my analysis, I utilized the June 30^th, 2017, trade price of $105.27 and $10,000.00 as the face value. With that, I obtained a base price of $10,527.00 and accrued interest of $160.33, resulting in an invoice price of $10,687.33 (See Appendix A). Additionally, I obtained a yield-to-maturity of 2.961% for the bond. Further computation shows a yield-to-first-call of 2.941%, which is the yield-to-worst because the bond call date is just three months away from maturity. The bondholder is better off if Intel chooses not to call the note.

Given the current market condition and Federal Reserve's signal to raise rates, Intel may decide not to issue a call on April 29^th, 2025, even if the company has the fund to do so. Perhaps, if the market interest rate falls to the level that makes financial sense for Intel to call the bond at the predetermined price and simultaneously issue a new bond at a relatively lower interest rate, the company might be compelled to call the note to save on interest expense.