Morning Commentary: Intel drops in value as market again responds to call news

By Abigail W. Adams

Portland, Me., Nov. 20 – Intel Corp.’s 2.95% and 3.25% convertible notes continued to dominate trading in early activity Monday as the market continued to respond to the company’s decision to redeem its 2.95% convertible notes due 2035 in December.

Both notes continued to lose value in early morning trades. After dropping about 4 points on Friday to close the day at 166.471, the 2.95% convertible was trading around ˝ point lower at 165.955 early Monday, according to Trace data.

The company’s 3.25% convertible notes due 2039 also dropped about 4 points Friday to close the day at 214.681. The notes rallied slightly early Monday before falling to the last recorded trade of 214, again a loss of around ˝ point, according to Trace data.

Intel stock was up slightly in early trades at $44.93, an increase of 0.67%.

Intel announced Nov. 16 it would call its 2.95% notes on Dec. 18, redeeming the full $1.6 billion. Sources pointed to the high coupon rate as motivation for the company’s decision.

The 3.25% convertible note due 2039 has $2 billion outstanding and is non-callable until Aug. 2019.

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