“If Apple Inc. were a bond fund, it would dwarf the competition,” Claire Boston reports for Bloomberg News. “The iPhone-maker has $148 billion of its record $257 billion cash pile invested in corporate debt alone, according to a company filing from Wednesday. That’s enough to buy all the assets in the world’s largest fixed-income mutual fund, the Vanguard Total Bond Market Index Fund, which has about $145 billion of assets including company, government and mortgage bonds… After corporate bonds, Apple’s next-largest holdings in its pile of cash and marketable securities are $53 billion it allocates to Treasuries and $21 billion it keeps in mortgage and asset-backed securities”
“Like many technology companies, Apple has resisted transferring the money it earns abroad back to the U.S. to avoid triggering corporate income taxes on the earnings,” Boston reports. “Instead, the Cupertino, California-based company invests in corporate bonds and other assets like money market funds and U.S. Treasuries. With more than 90 percent of its war chest abroad, the company regularly issues bonds of its own to help fund programs like share buybacks and capital spending.”
“Apple and other cash-rich companies are holding out, hoping that they may soon be able to bring their cash home at a lower tax rate,” Boston reports. “President Donald Trump’s tax plan includes a repatriation provision, though it didn’t specify a rate. He proposed a 10 percent levy when campaigning, and Treasury Secretary Steve Mnuchin has said the rate would be ‘very competitive.'”
Read more in the full article here.
MacDailyNews Take: Free money.
Apple raises $10 billion in debt ahead of President Trump’s repatriation tax plans – February 3, 2017
Apple has now amassed nearly $80 billion in debt – September 12, 2016