“Apple Inc. is selling $12 billion of bonds to return capital to shareholders in the second-largest corporate debt offering in the U.S. this year,” Aleksandra Gjorgievska reports for Bloomberg. “The iPhone maker will sell the securities in 9 parts, with the longest-dated bonds maturing in 30 years, according to a person with knowledge of the matter. Proceeds will also back general corporate purposes, including acquisitions and repayment of debt, said the person, who asked not to be identified because they aren’t authorized to speak on the issue.”
“Apple is proposing to sell $2.5 billion of 30-year bonds at a yield of 2.05 percentage points more than similar-maturity Treasuries, said the person,” Gjorgievska reports. “The company’s also planning to sell $2 billion of 10-year bonds at a yield of 1.5 percentage points more than similar-maturity Treasuries, according to the person, which is a 30 basis-point premium compared to similar bonds, Bank of America Merrill Lynch data shows.”
“Apple is also marketing seven-year green bonds, debt that typically backs clean energy and other sustainable initiatives. This is the company’s fifth multibillion dollar offering since 2013. It issued $8 billion in bonds in May to boost shareholder capital,” Gjorgievska reports. “Apple’s offering comes as the markets reopen after a week where issuance of corporate bonds was frozen amid renewed concerns about the health of the global economy. ”
Read more in the full article here.
MacDailyNews Take: More free money!
SEE ALSO:
How Apple’s massive debt-powered buybacks actually save the company money – December 28, 2015
Why investors should love Apple’s debt strategy – August 21, 2015
Apple plans record Kangaroo bond debut – August 20, 2015
Apple preps first Kangaroo bond; likely to set Australian corporate bond record – August 17, 2015
Apple’s samurai bond pushes debt to $45.5 billion – June 3, 2015
Apple set to issue $1.6 billion of yen-denominated bonds – May 27, 2015
Why Apple is selling bonds in Switzerland – February 10, 2015
Apple plans debut Swiss franc bond sale; looks to exploit Switzerland’s low interest rates – February 9, 2015
Apple preserves overseas cash hoard, raises $6.5 billion from bond sale funding share buybacks – February 4, 2015
Apple plans $5 billion bond sale; fourth since 2013 – February 3, 2015
Orders pour in for Apple’s $12 billion bond offering – April 30, 2014
Apple debt offering only $12 billion – April 29, 2014
Apple about to join the ranks of the biggest U.S. corporate debtors – April 29, 2014
Apple readies blockbuster $17 billion debt sale – April 28, 2014
Apple plans another massive debt sale to fuel new share repurchases, dividends – April 25, 2014
Damn I hate this phrasing, “Apple Inc. is selling $12 billion of bonds to return capital to shareholders in the second-largest corporate debt offering in the U.S. this year.” Apple is not RETURNING a damn thing to shareholders. Virtually NO current shareholders paid Apple anything for their stock. There is absolutely nothing to “return”.
Also, Wall Street has already started making noises about the amount of long term debt Apple has. This offering will only make those comments louder and more common. Apple’s growing debt will be just one more weapon Apple naysayers will use to knock the price of AAPL down.
This insanity of continuing to go into debt needs to stop, but with the bean counters running Apple today, I doubt it will.
What is of course hilarious was the screaming rage from analcysts and activist stockholders that Apple SHOULD go in debt as a method of dealing out their massive cash cache to the world. It has also been hailed as a great way for Apple to bring their overseas cash cache into the USA without incurring the outrageous US taxation on foreign made profits. That’s actually GREAT for Apple and the USA.
However, to I see any real sense in Apple going into debt over their cash savings? NO! The whole thing is a contrived mess in order to make insane powers-that-be happy. And we all know there is no pleasing the insane.
Going into debt is never good if you don’t have to, and Apple doesn’t have to.
This is the ONE time where I actually side with the “Steve Jobs would never have allowed this” crowd. Steve Jobs would never have allowed Apple to go into debt. And he probably would have never piled up billions and billions of dollars for a bonfire called “buybacks” that has yielded absolutely nothing. Wall Street doesn’t care how many shares are outstanding, or what Apple’s P/E ratio is, or any other metric that is normally used to set a stock’s target price. Apple could buy back 50% of the shares outstanding and the stock would still trade for less than $120 because that’s how Wall Street things about Apple…going out of business since 1996.
Stop the by back and increase the dividend. After that quit borrowing.
this is a bad idea. or at least the continuation of a bad idea.
when you start playing wall streets game, you are nothing more than a fish out of water caught between two very hungry cats.
it is their game, they write the rules, rules written to their benefit – not yours.
it works just like in a casino, you may gain some short term wins, but in the long run, you lose.
stock buybacks may sound good within the context of the wall street pitch, but i have yet to see any benefit to me, the stockholder.
it hasn’t helped increase apples stock valuation, that i can see, although doubtless wall street told them it would be a good thing to do, in that department.
well, after all, why shouldn’t we trust them?
duh.
Get out of debt and stay out of debt to stay healthy. Why is Apple playing this mindless game? Fix the software. Make the best products on the planet. Fire the MBAs.
great job
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