Intel Default Insurance Costs Hit Record High as Cash Burn Warning Lands
INTC has more than doubled off its 52-week low of $32.89.
Summary
The cost of insuring Intel's debt against default jumped to an all-time high, with five-year credit default swaps widening 17.5 basis points to 124.75 bps — the biggest one-day move since October 2022, per Markit data. The trigger is the company's warning that it will burn cash this year as the PC market falters, which follows Thursday's after-hours collapse in the shares on Q4 guidance far below consensus. Credit markets are now pricing Intel's balance sheet risk more harshly than at any point on record, a different and arguably more serious read than the equity selloff alone. The August equity raise of roughly $20 billion at $95 a share was meant to shore up the balance sheet; a record CDS print suggests bondholders want more proof that the cash drain stops.
At the time of this announcement, INTC was trading at $67.06 on NASDAQ in the Technology sector, with a market capitalization of approximately $354.5B. The 52-week trading range was $32.89 to $142.35. This news item was assessed with negative market sentiment and an importance score of 7 out of 10. Source: Reuters.