“Apple has raised $10 billion in debt through a nine-part bond sale of both fixed and floating rate notes, according to the company’s final pricing term sheet filed with the U.S. Securities and Exchange Commission on Friday,” Joe Rossignol reports for MacRumors.
“Apple held $246.1 billion in cash and marketable securities last quarter, but around 94% of that money is held overseas and would be subject to high U.S. taxes upon repatriation— something U.S. President Donald Trump plans to change,” Rossignol reports. In the meantime, by raising debt through bonds, Apple can pay for its U.S. operations at a much lower rate, particularly given its low-risk Aa1/AA+ bond credit rating.”
Rossignol reports, “Apple typically uses the capital raised to fund dividend payments to shareholders and its share buyback program.”
Read more in the full article here.
MacDailyNews Take: Free money is free money. Might as well generate it!
SEE ALSO:
Apple has now amassed nearly $80 billion in debt – September 12, 2016
Not exactly free money. More like debt at a low interest that can allow Apple to reduce its outstanding share number and reduce the cost of dividend payments as a result.
Note that Apple’s debt is significant and it would be smart to make sure that they have cash to cover this especially as the debt is often long term.
Trust me, the way Apple does it, it’s free money.
I don’t know how it is free money, but I’d take your word for it.
Because you certainly know it all ! LOL
Trust me. As someone who has done both U.S. and International debt over the years (largest single transaction/principle was/is $1.5 billion), this is NOT free money. It may be less expensive than other ways to have immediate cash for what Apple wants to do with it, but it is absolutely NOT free.
I’d love to trust you, but I’m having a hard time when you are referring to the largest single transaction as a principle (i.e. a moral rule to live by), rather than a principal (a main component of something, such as a loan).
Rule of Economics 101: TINSTAAFL.
With the unpredictable way things are moving with Trump, shouldn’t Apple have waited till the Repatriation changes were set before going ahead with creating more debt?
you guys who swallow this free money idea are every bit as gullible as those who discounted the law of big numbers when the sales of iPhones kept rocketing upwards – until they didn’t.
play by wall streets rules – die by wall street rules.
here is the thing to keep in mind about wall street and big banks and big bankers. they are driven by greed and nothing else. profit is just a means to an end – their wealth.
these people are already so wealthy, and have diversified their wealth so thoroughly that they are basically immune from harm when their speculative schemes collapse.
not simply immune from prosecution, but they own real estate, gold, jewels, have money in non dollar currencies. no matter what happens they will still be wealthy while the rest of us may be ruined.
i do not condemn capitalism, it has made me very comfortable, and has, in the long run served our nation well, but when conducted as it is today, it is a just another disaster waiting to happen.
how many scandals and crises have we gone through since the 1980’s, one after another.
and how many between the 1930’s and 1980’s ? sure there were recessions, minor ups and downs, but nothing to compare with recent decades, why? because there were pretty strong regulations that were systematically dismantled in the 80’s and 90’s.
play at our collective peril.