Mountain of cash allows Apple to sidestep commercial paper backstop

“Apple Inc. is one of a handful of companies that gets special treatment in the commercial paper market,” Vipal Monga reports for The Wall Street Journal. “The technology company is able to borrow short-term money through a commercial paper program without the traditional credit line as a backstop.”

“Analysts at Moody’s Ratings Service noted in an April 30 report that Apple will rely on its high cash balances to meet the commercial paper maturities if it ever can’t refinance the debt,” Monga reports. “The ratings service gave the company its highest P-1 rating.”

“Apple had about $40 billion in cash and short-term securities at the end of March, and another $109 billion of long-term securities that it could easily sell to raise cash,” Monga reports. “That cash hoard gives it the flexibility to borrow without the credit line, said Gerald Granovsky, an analyst with Moody’s.”

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