Why Apple is selling bonds in Switzerland

“There are likely three reasons Apple is turning to Swiss investors for cash,” Ben Edwards reports for The Wall Street Journal.

“One: the lure of cheap rates. Switzerland’s government debt yields below 0% all the way out to 11 years, meaning corporate bonds – the price of which is typically linked to government debt – is super cheap too,” Edwards reports. “Two: Apple can use proceeds from debt sales to fund buybacks and dividends, a less expensive option than using cash earned outside the U.S., which would be taxed if brought back from overseas.”

Edwards reports, “And third: Selling bonds in Switzerland allows Apple to tap a new set of fixed-income investors.”

Read more in the full article here.

Related articles:
Apple plans debut Swiss franc bond sale; looks to exploit Switzerland’s low interest rates – February 9, 2015
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

4 Comments

  1. I doubt that you can identify a country that has not been unscrupulous in some way at some time. And I don’t really consider the act of issuing corporate debt in Switzerland as supporting the country. If anything, Apple is taking advantage of investors that are willing to loan their money to Apple for practically no return at all.

  2. Don’t understand how this would work.. Doesn’t selling bonds in Switzerland still keep the money outside the U.S. or risk some kind of tax/fee when you bring it in to the U.S.? If it is meant to pay for buybacks and dividends outside the U.S. why not just use the funds already out there?

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