Apple is again access the debt market by issuing bonds, raising $4.5 billion. The company split the new offering into four parts: $1.5 billion of 4% notes due in 2028, $1 billion of 4.2% notes due in 2030, another $1 billion of 4.5% notes due in 2032, and $1 billion of 4.75% notes due in 2035.
GuruFocus:
With about $8 billion in debt maturing between now and November, this move helps Apple spread out repayment timelines while locking in favorable rates. Investors jumped in fast. Orders hit $10 billion – more than twice the amount Apple was looking for.
That kind of demand shows investors are eager for strong names, especially now that bond spreads have narrowed by around 20 basis points since late April. That timing lines up with signs of a possible easing in U.S. tariffs, which may have helped credit conditions.
Even with over $200 billion in cash, Apple sees smart borrowing as a way to fund buybacks and dividends at a cost of just 4.5% – well below its average capital cost. That lets the company keep its cash pile intact for investments in services, wearables, and R&D.
MacDailyNews Take: A very nice reception for Apple’s latest bond offering!
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I wish I could fully understand Apple’s financial moves. Apple operates so differently from other tech companies that sometimes I wonder If Apple’s way is better than simply acquiring companies to excite investors. I suppose Apple’s share price doesn’t actually represent Apple’s true value, and these tariffs have likely put shareholders into confusion and that’s why they’re continually dumping Apple stock. I’m a 21-year Apple shareholder, so this current drop in share price doesn’t worry me too much. Apple certainly knows how to manage its finances. However, all it does is share buybacks and the latest dividend is such a small increase from last year that investors don’t seem very interested in buying Apple stock. At least outstanding shares have dropped below 15 billion, which is nice to finally see.