Apple to tap debt market with six-part bond deal that could raise $7 billion

“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.”

Read more in the full article here.

MacDailyNews Take: The sooner, the better on U.S. tax reform, including repatriation of accumulated cash held overseas.

4 Comments

  1. Awash in free cash, obviously now is the best time to reward banks and multinational corporations with more breaks. /s

    Debt is the way to greatness, if you listen to Wall Street or are a real estate developer with zero fiscal credibility.

    1. I don’t know what you’d prefer they do. The interest rate on that corporate debt is far less than the hit they’d take by repatriating the cash. I don’t know what other move they could make that would make as much financial sense.

      1. Apple could maintain its product lines like iPods, Macs, Airports, and displays.

        Apple could take a leadership role in battery technical development and manufacture.

        Apple could open more stores in underserved parts of the globe.

        Apple could hire somebody to fix iTunes.

        Apple could give a golden parachute to the dead wood in the executive suite.

        Apple could put real effort into Maps or search.

        Apple could fix iCloud and provide enough free storage to fully backup the devices you actually purchased.

        Apple could lower the prices on their many stupid cable adapters that still don’t make any sense.

        Apple has tons of ways it could better serve its customers with its huge cash reserves.

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