Mike Wuerthele
Apple continues to leverage bond sales and low interest rates to fund both its stock buyback program and green initiatives, with an upcoming third sale this year to hit US debt capital markets.
According to the Financial Times, the sale is three-times over subscribed, and will happen in five parts. The joint book running managers for this bond sale are likely again Goldman Sachs, Bank of America Merrill Lynch, Deutsche Bank Securities, and J.P. Morgan, the same managers as the last two U.S. sales.
The February US offer was a $12 billion effort, with a "Green bond" issue for $1.5 billion to finance clean energy projects. Bond sales in 2015 generated $8 billion for Apple.
A bond sale in Taiwan concluded on June 8, and generated $1.38 billion in 30-year bonds, 40 percent more than originally expected.
Apple intends on spending $58 billion in the span of the next two years on stock buyback programs. In April, the company claimed that the capital return program funded in part by the bond sales, has returned more than $163 billion to investors since its activation in August 2012. Share repurchases accounted for $117 billion of the $163 billion.
William Gallagher
Charles Martin
Christine McKee
17 Comments
If they're three times oversubscribed, maybe they're offering too high a yield?
Interesting that S&P didn't give a AAA rating. Junk housing bonds get the highest rating, but one of the richest and most profitable companies in the world offer a low rate bond that they can cover today with cash reserves, and that's seen as riskier. To hell with the rating agencies.
Apple is spending so much money on buybacks it's unreal. I guess it's a good thing but I think of how they could have spent more money on buying some other businesses to increase revenue. Wall Street positively loves Amazon for its business expansion. They keep buying up other businesses and the company keeps growing and growing. If Bezos keeps this up, they'll definitely pass Apple in market cap in a few more years. Amazon stock just keeps soaring without limits while Apple struggles and can't seem to shake the doom and gloom of being a dying company.
Amazon has a P/E of over 300 and Apple can't even manage a P/E of 15 due to lack of investor confidence. It's just crazy. Amazon investors love Bezos and Apple investors hate Tim Cook. Amazon is always being praised while Apple is constantly criticized as being poorly run. Amazon is run perfectly for investors while it seems Apple doesn't have a clue what investors want. Even the buybacks aren't good enough for Apple investors. I really don't understand Apple's at all. They seem to keep doing what no one wants them to do.