Apple expected to issue less debt in 2018 now that President Trump has signed the Tax Cuts and Jobs Act

“After five years of rapid growth in corporate bond issuance, technology companies are expected to issue less debt in 2018 as they start to bring cash parked overseas back to the U.S.” Ciara Linnane reports for MarketWatch. “That’s according to CreditSights analysts in a new report that forecasts that companies, including Apple Inc., Broadcom Ltd. and Microsoft Corp., will stop the practice off issuing bonds to raise the funds for shareholder rewards and repatriate foreign earnings instead.”

“Companies opted to raise debt domestically, rather than pay the 35% tax rate that overseas cash was subjected to under the former tax regime. The tax bill signed into law by President Donald Trump in December has changed the math, even though the repatriation rate is higher than previously expected at 15.5% for cash and 8% for illiquid securities,” Linnane reports. “‘We expect IG tech issuance to be down year-over-year for the first time in about eight years,’ analysts led by Jordan Chalfin wrote in the report.”

“Oracle Corp. and Apple squeezed in bond deals in November, just ahead of the passage of the tax-code redo, in what Chalfin called ‘a last hurrah,'” Linnane reports. “Apple was the biggest tech issuer in 2017, selling $30 billion of dollar-denominated debt, driven entirely by its massive shareholder returns program, which includes dividends and stock buybacks. CreditSights is expecting the iPhone maker to refinance the $6.5 billion of bonds that are maturing this year.”

Read more in the full article here.

MacDailyNews Take: The era of big corporate debt is over.

Apple to tap debt market with six-part bond deal that could raise $7 billion – November 6, 2017
Congressional Republicans deliver epic overhaul of U.S. tax laws to President Donald Trump – December 20, 2017
Republican-controlled U.S. Congress poised to approve biggest tax system overhaul in 30 years – December 19, 2017
GOP tax cut plan sets 15.5% repatriation rate on offshore cash; 8% if invested in plants and equipment – December 16, 2017
GOP eyes taking bigger bite from Apple, others holding cash overseas to seal President Trump’s tax cuts – December 15, 2017
Apple could be biggest beneficiary of Republican tax reform plans, saving at least $47 billion – December 6, 2017
Dow soars 203 points higher to record as Wall Street cheers U.S. Senate passage of major tax bill – December 4, 2017
Oracle joins Apple in support of President Trump’s tax repatriation plan – November 7, 2017
President Trump’s tax cuts could be YUGE for Apple – September 28, 2017
GOP tax plan calls for cutting the corporate tax rate from 35 percent to 20 percent – September 27, 2017
Goldman Sachs sees $1 trillion in U.S. tax cuts coming – September 20, 2017
Apple will eventually bring billions of dollars back to the U.S. under President Trump’s tax reform plan – July 21, 2017
President Trump’s tax reform plan includes deep cuts in corporate taxes – April 26, 2017
Apple could be primed for profit explosion under President Trump’s big tax cut – April 26, 2017


        1. The Dr had his finger up Trump’s backside, not Obamas. He never said that of Obama. That Dr. at the press brief looked like someone was pressing a knife on his spine.

        2. Yeah, that would be the Trump 24/7 HATE MEDIA.

          Still, the good doctor that examined Obama and others was steadfast and true. Answered every leading media question with good grace. The President Trump haters, LIKE YOU, couldn’t lay a glove on him.

          Bwahahahahahahahahaha …

      1. When I heard 239lbs I almost spit out my mouth full of chocolate cake and coke. Call me a girther, if you like. He’s gotta be closer to 260+.
        What’s the real shame in all of this is his poor representation. I don’t need/want another M Obama telling me to eat my veggies, but I’m greatly encouraged when an older person is active and looks pretty fit. Pears don’t encourage me and he looks terrible. Melania must be thinking about returning to her homeland.

        1. The guy is what, 6’2″ or 6’3″ in his seventies, historically, the oldest elected president elected to office.

          Perfect health and live to be 200 years, so to speak, and your problem with 239 lbs. is what, exactly? Porker? Yeah, right.

          Certainly NOT obese at that height and age, try again …

  1. What jobs act? What jobs did Bush create under his tax cuts? Tax cuts are nothing but free money for the rich and corporations that create massive debt which in turn eventually leads to cuts in social programs. They never create jobs.

    Under the new tax cuts which was all GOP which Trump had no part in, an individual making $50K will get back about $32 per month. When gas finally came down from the high of $4 a gallon, it but money back in people’s pockets. The amount was around $25 – $30 a month. It did nothing for the economy. Extending the Bush tax cuts under Obama did nothing for the economy.

    About 53% of people making under $50K will see a tax cut starting 2019. Every year after that until 2025 that tax cut will shrink till it expires. But not for the corporations and rich. After they expire about 18% will have their taxes go up and about 8% will their taxes go down. Meanwhile our national best will increase by trillions.

    1. There you go again, bj. Please, stop with the orgasmic assertions that come spasticity out of your mouth and explain, I mean really lay it out, your 3rd and 4th sentences. I’m patient. I’m curious. I’m waiting to be enlightened…cuz right now the spasm is all I see.
      A couple of specific I’d hope you address.
      1). should people get monies above/beyond what they didn’t put in?
      2). If a wealthy person gets back some of what they put in, does that make you nutty?
      3). Are the rich getting free money (money they didn’t put in) as a result of a tax cut?
      4). Would the ideal be for some/more of the tax return go to those who didn’t previously pay in such funds?
      5). do the majority of the wealthy put their money under the mattress, or in a suit coat pocket in the closet…in other words, just hoard it?
      6). Do you have late night, early morning, mid-day cravings and expectations that what’s in your neighbor’s back pocket should yours instead?
      7). Do you find these questions upsetting because if you were to answer honestly, people would see that you like the phrases; “spreading the wealth” and “I believe there’s a point where some have made too much money?”
      8). Do you think a pile of money takes time off, relaxes and just kicks back and, or the “velocity of $$” concept is mere voodoo?
      9). are you inclined to think the person asking these questions automatically doesn’t care about the debt, social programs and is like those rich fat bovines because he/she believes in the majority of instances, tax cuts create jobs?
      10). Did you forget to revise your sentence about what will happen in 2025, per tax levels re: “rich and corps?”

      1. Most excellent questions.

        I would not expect a serious policy response from bjr001.

        His/her comments are more the condescending drive-by variety. Since the posts from bjr001 show little capacity to think CRITICALLY beyond the TYPICAL robotic party talking points …

      2. bj: I had a good night sleep on my dollar filled mattress and was sure it would allow enough time for your detailed and measured response. Disappointedly, I was wrong. Are you reassessing your position? Regardless, I’m waiting for you like a tax return.

    2. Tax cuts are “free money for the rich?”. Sounds like you don’t pay a lot of taxes. Those of us who do realize we are simply giving less away to a wasteful government. Over half the country doesn’t pay any income tax- give me a break with the whining.

    3. This post is so full of errors, it is not reply worthy. But I just couldn’t help myself.

      1. A married person making $50k will pay around $2K less, or 4.1% of actual net money in the pocket increase. Talk to someone who netted $875 per week after federal tax in 2017, and ask them if $40 per week will help them.
      2. Tax cuts start in 2018 and stay consistent until 2026 when it will be made permanent.

      1. As a further reply to bjr001, corporations and businesses are owned by people. People will have more in their pockets or savings or 401K’s or IRAs or investments. Corporations and businesses create jobs, buy raw materials and components made by people to create wealth for people. Just because the large numbers astound you, please realize or admit that your life would probably be pathetic without them. You should hope with all your heart that corporations in America are successful.

  2. What was it Trump said after winning the election, oh yea, I’ve inherited an economic mess. Everyone should be so lucky to inherit the mess Obama left Trump considering the Armageddon Obama inherited form Bush.

    1. “considering the Armageddon Obama inherited form Bush” Glad you mentioned that. Because you must be talking about the same mess that blew up during Bush’s time in office. You know, how Clinton decided to have bank’s give out home loans to those that couldn’t afford it and having that detonate during Bush’s time. Or how about the 2 times Clinton didn’t have the balls to take out Osama before 911 but instead did nothing except get a bjr001 from monica.

  3. It could happen, but as an amateur observer it is hard to see why Apple would bring much money here. Assuming it costs 15.5% to repatriate overseas funds, that compares to the almost free cost of borrowing money. Apple borrows at a cost of about 3%, but they pay this back with inflated dollars. The current inflation rate is 2.2%. The difference is less than 1%. Please teach me, why would Apple repatriate money at a cost of 15.5% when they can borrow for less than 1%? There might be a reason for this, I just don’t know it.

    1. I’m thinking they’ll bring it back just because Tim has said time and time again they don’t mind bringing it back as long as it was a “reasonable” rate. I think now it is finally at a reasonable rate and apple being apple will try to take the lead on this and bring their money back as the “right thing to do”

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