“The total ‘cash pile’ that’s composed of cash and investments adds up to $256.8 billion, while the total debt pile comes out to $98.5 billion,” Maurer writes. “Of course, this doesn’t tell the whole story, because of that quarter trillion plus in cash and investments, $239.6 billion is held outside the US, unable to be used for dividends and buybacks.”
“Since we are still waiting for the Trump administration to come to terms on tax relief and repatriation, Apple management doesn’t want to pay huge amounts of taxes to bring its foreign funds home. As a result, taking out debt at very low rates continues to be the best move,’ Maurer writes. “The company took out $7 billion in debt last week to continue the status quo. With Apple paying just around 2.00% after taxes on the fixed rate portion of last week’s issuance, don’t expect the company to change what it is doing anytime soon.”
Read more in the full article here.
MacDailyNews Take: When the money’s basically free, you might as well generate it and use it to get the share count down and reward shareholders vid dividends.
Why Apple is investing $148 billion in corporate debt – May 4, 2017
Apple raises $10 billion in debt ahead of President Trump’s repatriation tax plans – February 3, 2017
Apple has now amassed nearly $80 billion in debt – September 12, 2016