“Apple Inc. will likely issue the company’s first yen-denominated bonds in June, people familiar with the issuance said Wednesday, in the latest of several moves to take advantage of rock-bottom interest rates in some non-U.S. markets,” Takashi Mochizuki and Eleanor Warnock report for The Wall Street Journal.
“The U.S. tech giant will issue around ¥200 billion ($1.6 billion) of yen-denominated bonds and use the proceeds for shareholder returns and possibly also to expand Japanese operations, one person familiar with the matter said,” Mochizuki and Warnock report. “Japanese bond yields and issuance costs are some of the lowest in the world as the central bank keeps interest rates low with its massive monetary easing program.”
“The company has been using proceeds from debt sales to fund payment of dividends and to buy back shares,” Mochizuki and Warnock report. “It has been using newly issued funds for these purposes rather than using its overseas holdings of cash from foreign earnings, which would be taxed if brought back to the U.S.”
Read more in the full article here.
MacDailyNews Take: Free money, compared to the alternative.
Related articles:
Apple takes on more debt to fund expanded capital-return program – May 6, 2015
Apple’s continued debt offerings are good news for investors – February 10, 2015
Famously debt-free under Steve Jobs, Apple is now on the hook for $43 billion in total debt – February 4, 2015
Nuts!
I recognize that everyone’s investment situation is different and that stock investments generally involve greater volatility and potential for loss.
But I would favor investing in AAPL rather than Apple bonds. with AAPL, you retain potential upside from stock appreciation in addition to the ~1.7% dividend yield. If you are risk averse, you can probably hedge your AAPL downside using the dividend money to purchase options.
No debt, to big debt over taxes. This makes no sense. A company that has the money to pay it’s shareholders should just pay the shareholders. Apple is making great money, but that’s not a forever thing.
Think about the DOW, all those companies that were once high flyers, listed as DOW companies, are no longer part of the DOW, and it’s not because of taxes.
If this is such a good idea, why are people complaining about the national debt, America not going out of business tomorrow. Hundreds of years to pay down debt… Hundreds, how old is England. Your kids’, kids’, kids’, kids’ …