“Apple Inc. is once again tapping the corporate bond market with a six-part deal that could raise $7 billion,” Ciara Linnane reports for MarketWatch.
“That’s according to research firm CreditSights, which based its calculation on the fact that Monday’s deal has two more tranches than a 4-part deal in September that raised $5 billion for the iPhone maker,” Linnane reports. “Apple is planning to issue 2-year, 3-year, 5-year, 7-year, 10-year and 30-year fixed-rate notes with initial price talk implying 16 to 27 basis points of new issue concessions (NICs), said CreditSights, referring to the discounts institutional investors are granted to encourage them to buy the deal.”
“Proceeds of the deal will be used for the catchall ‘general corporate purposes,’ which again include share buybacks and dividend payments,” Linnane reports. “Apple has repeatedly borrowed in the corporate bond market to reward its shareholders, rather than repatriate some of the $252.3 billion in cash CFO Luca Maestri said last week Apple holds overseas, which would be subject to a 35% tax rate if brought back to the U.S.”
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MacDailyNews Take: The sooner, the better on U.S. tax reform, including repatriation of accumulated cash held overseas.