Apple is once again tapping the U.S. investment-grade bond market with a new debt offering in as many as four parts as the tech giant increasingly looks to return cash to shareholders.
The longest portion of the offering, a 40-year security, may yield 1.15 percentage points above Treasuries, according to a person familiar with the matter, who asked not to be identified as the details are private.
Proceeds from the sale will be used for general corporate purposes, including share repurchases, dividend payments, funding for capital expenditures and acquisitions. S&P Global Ratings assigned a AA+ rating to the proposed bonds.
Apple, the world’s largest company by market capitalization, has been an active bond issuer of late, capitalizing on historically cheap borrowing costs. The iPhone maker sold $14 billion of bonds in February. Until 2020, Apple hadn’t borrowed in the U.S. investment-grade market more than once in a calendar year since 2017. Now, it’s selling bonds for the fourth time since May 2020.
MacDailyNews Take: Free money is free money!
We ended the quarter with $194 billion in cash plus marketable securities. We retired $3 billion of term debt and increased commercial paper by $3 billion, leaving us with total debt of $122 billion. As a result, net cash was $72 billion at the end of the quarter.
As our business continued to perform at a very high level, we were also able to return $29 billion to shareholders during the June quarter. This included $3.8 billion in dividends and equivalence, and $17.5 billion through open market repurchases of 136 million Apple shares. We also began a $5 billion accelerated share repurchase program in May, resulting in the initial delivery and retirement of 32 million shares. — Apple CFO Luca Maestri, July 27, 2021