Apple on Wednesday filed a prospectus for the issuance of debt, totaling around $7 billion, with maturities ranging from 2022 to 2049.
With investment-grade bond yields hovering near record lows, it’s tempting even for Apple — with more than $200 billion of cash and investment securities on its books — to see what investors will lend it. Turns out that number is $7 billion, or just over 3% of its current coffers.
With the 30-year Treasury at record lows, many companies have been able to borrow more cheaply for much longer. Apple will pay around 2.99% interest on its new 30-year bonds, compared with the 3.45% it’s paying on three-decade bonds it sold in 2015. On a $1.5 billion issue, that equates to savings of nearly $7 million of interest annually, or more than $200 million over the course of three decades.
Today’s debt sale could help Apple refinance roughly $2 billion of debt that’s scheduled to mature this year in addition to much of the $10 billion it has coming due in 2020…
MacDailyNews Take: When they’re handing out free money, the wise take it.