Apple’s holds call with European debt investors about a potential bond sale

“Apple has never looked stronger. Its latest smartphone is a smash hit, its share price is at a record high and it’s sitting on $155 billion in cash,” John Jannarone reports for CNBC. “So why hit up European bond investors for money?”

“The company held calls Monday with debt investors about a potential bond sale including a component denominated in euros, according to a person familiar with the matter. It’s not clear when a transaction might be priced or how much money Apple might want to borrow,” Jannarone reports. “While a euro bond might look like an unusual move, there are several good reasons for Apple to move now. First, the company can’t actually use much of its cash without triggering tax obligations. While Apple had $155 billion in cash on its balance sheet at the end of September, $137 billion of that is held by foreign subsidiaries. The company has said that it would probably need to pay repatriation taxes on most of that money if it tries to bring it back to the U.S.”

“Apple may also need more cash soon. The company has already spent $94 billion on dividends and share repurchases out of a $130 billion program. It’s expected that it’ll spend the remaining $36 billion on more dividends and buybacks between now and the end of 2015, when the program is scheduled to end,” Jannarone reports. “And some investors want even more aggressive buybacks.”

Read more in the full article here.

1 Comment

  1. Wow $137B outside of the US. What happens when Apple has $1T sitting outside the US?

    If they can’t use it for buybacks or dividends then that value is going to start dragging down Apple stock returns, as its unlikely they can invest it all in anything that grows as fast as Apple’s real business.

    Good problem to have I suppose, but its a problem.

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