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Consumer Electronics

Apple Bond Sale Largest Ever

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By Paul Ausick Updated Published
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Apple-store
courtesy of Apple Inc.
We noted earlier this morning that Apple Inc. (NASDAQ: AAPL) had hired Goldman Sachs and Deutsche Bank to act as book-running managers for the company’s planned debt issuance. The Wall Street Journal reported this afternoon that the total amount of the debt offering will be $17 billion, the largest debt offering ever by an investment-grade company.

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.

Photo of Paul Ausick
About the Author Paul Ausick →

Paul Ausick has been writing for a673b.bigscoots-temp.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.

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