AppleInsider Staff
Deutsche Bank, Goldman Sachs and Apple are expected to host a call with investors today, arranging for a new blockbuster bond deal that will come at least partly in euros, according to a new report.
Citing a person familiar with the plans, The Wall Street Journal revealed the anticipated call on Monday, revealing that the bond issuing could come as soon as this week. If the rumor proves true, it would be the first time that Apple has issued debt in a currency other than the U.S. dollar.
Now would be an opportune time for Apple to issue a bond deal in euros, given record-low levels of borrowing costs in Europe. The money earned will allow Apple to finance its share buybacks and dividends.
Most of Apple's huge sum of cash is held overseas, and repatriating it to buy back shares or issue dividends would cost the company a considerable sum in U.S. taxes. As a result, Apple has opted instead to borrow, in addition to using its domestic cash, to fund its capital return program.
As of last quarter, Apple had $155.2 billion in cash and marketable securities. Apple has said multiple times that it has no plans to bring its cash back to the U.S. because of high tax rates.
Apple issued a $17 billion six-part bond offering in 2013, which at the time was the largest ever for a U.S. corporate offering. The company offered another $12 billion bond sale earlier this year.
Marko Zivkovic
Wesley Hilliard
Oliver Haslam
Christine McKee
Malcolm Owen
William Gallagher
116 Comments
Makes sense, then they can pay it off with their international cash hoard.
When is the conference call?
I assume they meant partly? Do they even read what they write, or just write and post?
[quote name="TheWhiteFalcon" url="/t/183207/apple-to-hold-investor-call-for-first-time-bond-offering-in-euros-report#post_2633323"]Makes sense, then they can pay it off with their international cash hoard.[/quote] Then why not just use the cash instead? Unless there is some potential regulatory arbitrage here to pursue: i.e., use the euro-denominated bond funds to finance activities in the US, and use the non-US funds to pay the coupon and principal. I am not sure whether that would fly with the IRS, however. I am very curious to see what Apple has to say about this.
If the $ continues to strengthen against European currencies I'd suggest Apple buying England and making it the 51st State. Wales, Scotland and N. Ireland could become Celtica or some new a catchy name. I admit I am unsure of the tax ramifications though.