Apple plans investor call ahead of potential bond

“Apple Inc. has its eye on the bond markets again, lining up a potential new deal that would likely build on a track record of blockbuster transactions,” Ben Edwards reports for The Wall Street Journal.

“Deutsche Bank and Goldman Sachs Inc. are arranging a call for the firm with investors Monday, and a deal, possibly at least partly in euros, could come as soon as this week, according to a person familiar with the matter. The iPhone maker has never issued debt in currencies other than the dollar before,” Edwards reports. “It was last in the bond market in April with a bumper $12 billion deal, following up on last year’s then record-breaking $17 billion sale, Dealogic data show. April’s seven-part bond sale attracted more than $40 billion of investor orders.”

Edwards reports, “Analysts at research firm CreditSights in April said Apple may issue as much as $5 billion in nondollar bonds this year.”

Read more in the full article here.


  1. Here we go again. More debt. Steve is probably rolling over in his grave.

    Tim and the board need to stop listening to “activist investors” and Wall Street demanding that Apple “return more to investors” and get on with making better products and a better company. Tim pays FAR too much attention to the publicity whores and greedy bastards on Wall Street.

    1. Shadowself: Thank god you don’t run Apple – you are obviously clueless when it comes to large money management. Apple borrows – at a ridiculously low cost of funds – in order to create cash that it can use in the US, rather than face the high cost of bringing cash into the US from overseas operations. Until the US changes its tax policies, it is a sound strategy.

      As for returning money to shareholders, errr… that is the purpose of a publicly held corporation. Even with the dividends and buybacks and borrowings, Apple sits on more cash than it ever did when Steve Jobs was alive.

    2. I am sure your heart is in the right place but as an investor in AAPL I applaud their cash management which has been inept for too long. Business comprises, inter alia, two aspects; first, operations/products/activities and second, the financing side. In essence they are managing the finance side by optimising their capital structure. I suggest you invest in a copy of Brealy & Myers “Principles of Corporate Finance” so that you can develop a basic understanding of these matters.

    1. breeze: AAPL is probably the best Investment Grade business in the world today in terms of their credit rating although at AAA they can go no higher. In that context they they can borrow on the cheapest and most flexible terms. Moreover I-Grade loans (and bonds) require minimal covenants and need not provide security/collateral or even guarantees. Additionally their cost of funds will be very low which will be even lower post-tax by virtue of their tax shield. The net effect is that they are funding buybacks and dividends with very cheap debt rather than expensive equity. This is amplified by the fact that, as most of their cash is offshore, they would incur tax charges (cash leakage) of 35% to remit these funds to the USA.

      1. I suspect that breeze was using the term “secured” as a shortcut for “Apple has the funds in hand to pay off the full amount of the debt at any time” as opposed to the technical meaning of “secured loan.”

        While I am debt-averse myself, as has been pointed out by others, this is technically just a financial maneuver by Apple to support the stock buybacks and dividends in the U.S. without repatriating foreign profits and incurring the additional tax. Apple has the money, just in the wrong place. This is rather like using a credit card to purchase items knowing that you can pay everything off at any time.

        I am heartily tired of people stating what Steve Jobs would or would not have done in a particular situation. Besides the fact that Steve evolved over time and was known to change his mind from time to time, he is not here to weigh in on the issues.

  2. Just been looking at the potential offering which raises some interesting technical issues. It seems the proposed offering includes some floating rate notes in Euros. Given the problems in that currency it is possible that if the base rate (probably Euribor) drops below zero (as in Japan) AAPL could be borrowing at close to zero? The other issue is what happens if the Euro really collapses or is dismantled? hmmm

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