Apple plans debut Swiss franc bond sale; looks to exploit Switzerland’s low interest rates

“Apple Inc. is seeking to add to its recent run of blockbuster bond deals with a debut sale in Swiss francs, according to one of the banks arranging the offering,” Ben Edwards reports for The Wall Street Journal. “Goldman Sachs Group Inc. and Credit Suisse Group AG have been hired to manage the potential sale, which could come as soon as Tuesday, a banker said.”

“Soaring demand for Swiss franc-denominated debt has sent government-bond yields into negative territory, meaning that investors are now willing to pay to lend Switzerland cash for as long as 10 years,” Edwards reports. “Those negative yields mean that Apple will also be able to borrow cheaply, because corporate bonds are typically linked to the price of government debt.”

“The maturity of Apple’s proposed deal hasn’t been decided but a short-dated bond could be sold with a negative yield—a first for a corporate bond issued in Europe,” Edwards reports. “Investors say Apple may consider a 10-year or 15-year bond, meaning that the yield would probably be lower than 0.5 percentage point.”

Read more in the full article here.

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Apple preserves overseas cash hoard, raises $6.5 billion from bond sale funding share buybacks – February 4, 2015
Apple plans $5 billion bond sale; fourth since 2013 – February 3, 2015
Orders pour in for Apple’s $12 billion bond offering – April 30, 2014
Apple debt offering only $12 billion – April 29, 2014
Apple about to join the ranks of the biggest U.S. corporate debtors – April 29, 2014
Apple readies blockbuster $17 billion debt sale – April 28, 2014
Apple plans another massive debt sale to fuel new share repurchases, dividends – April 25, 2014

10 Comments

  1. Oh that will help their reputation no end considering various Swiss Banks record in camaflaging tax evasion throughout the World that coincidentally is particularly in the news at this very moment this side of the pond just as recurring criticism of amongst others Apples, yes you get it, alleged tax avoidance won’t lie down. Tactical genius at work in the publicity department guys.

  2. With the loan nearly free, it’s surprising they don’t issue 10 times as much as announced. Maybe that much couldn’t be issued without driving up the rate.

  3. Apple needs not have to earn easy money through Wall Street’s methods. Apple had already earned their money through hard work, innovation and traditional values. I’m afraid that Tim Cook being nice and trying to please everyone and Wall Street has fallen into the wiles and trap of Wall Street. The US after being led by Wall Street’s advice and guidance has fallen into the trap of being a debtor country. Why do Tim Cook have to be greedy? Is it hubris? I’m afraid this would be the beginning of the downfall of Apple.

    1. Apple is not even close to becoming a debtor corporation. Its cash flow is more than sufficient to fund all of its operations and financial obligations, including dividends. That is why its pile of cash and securities has kept growing quarter after quarter.

      But I agree that Apple needs to keep focused on its core business, control its debt, and avoid getting entangled in the shenanigans of Wall Street.

    2. Good post, but consider for a moment the converse approach. Here you are a company of integrity facing a corrupt Wall Street, and a so called pure unadulterated evil government that would make George Orwell shudder.

      How you going to deal with this? Full on, guns blazing, thermonuclears armed? That’s not the way of the integral warrior.

      Your fears are justified, just as much as is the hope that this is the beginning of the end of the fall of the barbaric paranoid governmental empires and the golden age of the free and civilized world.

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