Apple reaps $7 billion after finalizing latest bond sale

Apple has completed an anticipated five-part bond sale, raising $7 billion in debt with the help of banks including Goldman Sachs, Merrill Lynch, J.P. Morgan, and Deutsche Bank.

The first part, $350 million, will mature in 2019 with a floating interest rate linked to a three-month LIBOR (London Interbank Offered Rate) plus 14 basis points, according to a U.S. Securities and Exchange Commission filing. The second, worth $1.15 billion, will mature the same year with a fixed 1.1 interest rate.

A $1.25 billion round matures in 2021 with 1.55 percent interest, while the biggest part — $2.25 billion — is set to mature in 2026 with 2.45 percent interest. The final $2 billion will only mature in 2046, but with 3.85 percent interest.

Apple has used a number of bond sales to help finance its capital return program for investors, increasing the appeal of shares through dividends and buybacks. The company could theoretically fuel the program through its cash reserves — now totaling over $231.5 billion — but most of that money is overseas, and the company has refused to repatriate it unless the U.S. government concedes to a "tax holiday" that will shrink the amount it owes.

Apple is ultimately expecting to reach $250 billion in the capital return program by March 2018, having already paid out over $163 billion.

26 Comments

crowley 10431 comments · 15 Years

About 8 years ago

Oh great, you're back.

ihatescreennames 1971 comments · 19 Years

sog35 said:

The only ones getting rich on this is the investment banks floating these bonds.

The fees they get on these are in the tens of millions. While shareholders are still down 25% from last year.

Those fees and the interest are less than the tax that would be owed by repatriating any overseas cash. What is the alternative to raise more capital?

Soli 9981 comments · 9 Years

sog35 said:

The only ones getting rich on this is the investment banks floating these bonds.

The fees they get on these are in the tens of millions. While shareholders are still down 25% from last year.

According to my math the stock is down 13% from a year ago. How did you get 25%

((104 / 120) * 100 = 86.67% the value from 1 year which is 100 - 86.67 = 13.33% down in 1 year

Soli said:

sog35 said:

The only ones getting rich on this is the investment banks floating these bonds.

The fees they get on these are in the tens of millions. While shareholders are still down 25% from last year.

According to my math the stock is down 13% from a year ago. How did you get 25%

He'll likely be taking the peak in 2015 and the trough of 2016. That or just guessing, he does both.

cnocbui 3612 comments · 17 Years

ihatescreennames said:

sog35 said:

The only ones getting rich on this is the investment banks floating these bonds.

The fees they get on these are in the tens of millions. While shareholders are still down 25% from last year.

Those fees and the interest are less than the tax that would be owed by repatriating any overseas cash. What is the alternative to raise more capital?

Not engaging in these ridiculous buybacks in the first place.