“Apple Inc sold a 30-year U.S. dollar bond in Taiwan at a yield of 4.15 percent, sources said on Tuesday, aiming to raise between $1 billion and $1.2 billion in the first issue of debt by the U.S. technology giant on the island that is home to major players in its supply chain,” Roger Tung reports for Reuters.
“The yield compares with a range between 4.2 percent to 4.3 percent ahead of its pricing, people familiar with the deal earlier told Reuters,” Tung reports. “The total amount raised by the bond – callable after the second year – had not yet been finalised, the people said, speaking on condition of anonymity because the matter was confidential. Subscriptions rates in the sale couldn’t immediately be determined.”
“The U.S. giant joins a crowd of big global names that have sold billions of dollars on the island’s busy debt market,” Tung reports. “Liquidity in the Taiwanese bond market is high, with long-term buyers of debt, primarily life insurance firms, seeking creditworthy names and chasing higher yields.”
Read more in the full article here.
MacDailyNews Take: Apple keeps making all the right moves. Giving that cash pile something to do by issuing debt benefits both Apple and theirs investors.
I can see why they would do this in the U.S. to avoid the repatriation Tax. But why can’t they use their over seas cash on hand for whatever they need the money for in Taiwan. I doubt they are getting 4-5% on their cash that is sitting in the bank.
“Apple keeps making all the right moves. Giving that cash pile something to do by issuing debt benefits both Apple and theirs investors.”
Are you complete idiots or what?
Apple does not need additional non U.S. cash. Apple does not *need* this debt. It is not “free money” no matter how you look at it.
The ONLY (truly ONLY) reason to do this debt offering is because of political reasons or relationship building with the government and financial markets in Taiwan. (From personal experience there is absolutely no reason to try to do something long term with the Taiwanese government. I had a multi $10s of millions project approved and going forward that within a year of starting got killed in a *literal* fist fight on the floor of their congress. I’ve been told several time since that this is not a rare occurrence.)
As for the financial/business relationship reason, Apple already runs billions through that country’s banks and businesses every year. Apple does not need to placate them any more than that.
I used to be a strong supporter of Tim Cook. His penchant to please unnecessarily the financial institutions worldwide at the expense of focus on Apple’s products and services (and quality of each) is causing me to question whether he’s the man for the job any longer.
Makes sense to me. Apple has been selling bonds all over the world to pay their dividends without needing to repatriate (and pay taxes on) their overseas cash.
Apple can’t borrow overseas, spend the borrowed $$ in the US on dividends, & then pay the bondholders off with overseas money. Would be nice if it were possible.
Likewise, Apple can’t use untaxed income to pay Foxconn & then sell the stuff they make without paying taxes on that income. If Apple could do this, there wouldn’t be any overseas hoard because Apple would use it to pay their overseas vendors. But they can’t so it ain’t gonna happen.