The company is going to the bond market to help it raise $100 billion to repurchase stock and increase its dividends. Apple has chosen to issue debt rather to pay for the buybacks and dividends because to pay cash would mean that the company would have to repatriate funds currently stashed in foreign banks and pay a hefty U.S. tax on the money.
The WSJ notes that demand for the bonds topped $50 billion according to “people familiar with the offer.” As a result, yields have been lowered.
Apple is offering four fixed-rate bonds, maturing in 3, 5, 10, and 30 years. The company is also offering two floating rate bonds, one maturing in three years and the other in five years.
The debt has been rated ‘AA+’ by S&P and ‘Aa1’ by Moody’s.
Apple’s shares are trading up about 3% in the late afternoon today, at $442.92 in a 52-week range of $385.10 to $705.07.
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