Apple gains on record $17 billion debt deal

“Strong appetite for Apple Inc. debt helped shares rally on Tuesday as the iPhone maker priced a $17 billion bond offering that is the largest on record for a U.S. nonfinancial corporate issuer,” Sue Chang and Saumya Vaishampayan report for MarketWatch.

“Shares of Apple climbed 2.9% to close at $442.78, extending their winning streak to a fourth day,” Chang and Vaishampayan report. “Apple is offering $17 billion in bonds to finance its $100 billion capital return to shareholders. The deal is in six parts with maturities spread out between three to 30 years. Apple priced the bonds at spreads ranging from 20 basis points to 100 basis points over corresponding Treasury notes.”

Full article here.

Related articles:
Apple to sell record $17 billion in bonds – April 30, 2013
iBonds: Apple plans six-part U.S. dollar bond offering – April 30, 2013
Apple lays groundwork for first ever debt sale; one of the year’s most anticipated bond sales – April 29, 2013
Apple files automatic shelf registration statement – April 29, 2013
Debt-free Apple to take on debt to avoid huge U.S. repatriation tax hit – April 26, 2013
Apple’s massive $100 billion capital return program is a perfect tax arbitrage – April 26, 2013
Apple to tap a hungry debt market; strong demand likely from investors eager to get cash off sidelines – April 25, 2013
Debt-free Apple plans to borrow to finance massive capital-return program – April 23, 2013
Apple beats Street on EPS and revenue; ups quarterly dividend by 15%; ups buybacks to $60 billion – April 23, 2013
Apple paid $6 billion in U.S. federal income taxes, 1/40th of all corporate income taxes collected by U.S. government in 2012 – January 5, 2013
Google, Apple, eBay shouldn’t pay taxes – people should pay taxes – November 25, 2012
So how much did Apple really pay in taxes? – November 1, 2012
Apple’s showdown with the U.S. government over taxes on offshore cash – July 13, 2012
Apple‘s $74 billion tops list of U.S. tech companies’ overseas cash – July 9, 2012
Apple’s dividend move puts spotlight on foreign cash holdings, repatriation tax reform – March 20, 2012
Apple: Good start; and what about the overseas cash? – March 19, 2012
Apple’s foreign cash hoard piles up: $54 billion and rapidly growing – January 11, 2012
Senator John McCain eyes Apple’s $54 billion overseas cash pile – November 3, 2011
Google joins Apple in push for U.S. repatriation tax holiday – October 3, 2011
Apple lobbies Obama for tax holiday, wants to bring overseas bounty home – August 24, 2011
U.S Senate Democrat Schumer allies with Apple, other multinationals on repatriation tax talks – June 21, 2011
U.S. companies push for tax break on foreign cash – June 20, 2011
Apple, Oracle, Duke Energy, others organize lobbying blitz for tax holiday – February 17, 2011

22 Comments

      1. I believe what Paul means is that the YIELD on bonds is artificially depressed right now thanks to the Fed suppression of interest rates.

        IOW: Yeah, the incentive to go into debt is being insistently shoved down everyone’s throat. But equally, the incentive to invest in bonds is being crushed. Therefore…

        1. True, if rates go up, the value of your bond will go down, but that hasn’t stopped bond traders from wanting $50B when only $17B was on offer.

          On the other hand, a small investor who wants some bonds, may very well hold until maturity and thus the price is largely irrelevant, as they are after the coupon.

    1. If Apple keeps the big pile of cash, Apple is criticized.

      If Apple finds a way to return a big portion to loyal investors, WITHOUT incurring a HUGE tax bill from the foreign cash, Apple is criticized.

      Message to Apple. Don’t pay attention to the morons making noise on either side… 🙂

      1. There are other options. Sitting on cash is stupid as inflation dilutes the value and debt is robbing future revenues for a short term payout of dividends.

        The crooks of Wall Street pushing for this debt deal and their useful idiots care nothing for the company, it’s employees, shareholders or it’s customers. They want an Apple buried in debt AFTER they have extracted what money they can from it and give not a damn about what is left behind.

        Apple used to use the cash pile to grow the company, now it is evolving into another shell company shuffling paper for profit.

  1. Help me understand this. Apple was debt free with around 130 billion in cash and soaring profits so the stock goes down. Now they are giving away their money in dividends and buy backs and going into debt for 17 billion and the stock goes up. Is it me or does this not make any sense?

    1. The cost of repatriating the overseas cash is far more than simply borrowing cheap cash here and disbursing it while we all wait for the current regime to finally get lost, so that taxes can be repatriated at a palatable level and America can get back to work and the economy can recover and prosper.

      1. I had thought you had died. Damn, let us politicize everything. I bet you are a joy to your coworkers and relatives. Friends? I am sure you have none you tea bag idiot.

    2. Simplistically, it doesn’t seem to make sense, but a company’s capital structure is based upon cost of capital. Apple’s cash is a drag on earnings, as it only makes around 1%. Reducing cash, will raise ROI. However, it’s not so simple for Apple as their cash is overseas. So, issuing debt, which is cheap, and with interest deductible, costs less than bringing the cash back and paying taxes.

      1. Only in our insane creative accounting systems in corporations does spending your savings and going into debt a good thing. Try that logic with your own finances at home and see where it gets you. I do see how the payback for their money is next to nothing, but I would think it better to put it to work in buying other companies. Yes, I agree they should buy back their own stock while it is low. The rest makes no sense to me.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.