Apple issues $5B bond sale to fund capital return program
Following initial notice of a pending bond sale, Apple on Wednesday launched a $5 billion U.S. dollar-denominated debt offering to fund its capital return program, outstanding debt, acquisitions and other operational expenses.
Detailed in a filing with the Securities and Exchange Commission, Apple's latest bond sale is comprised of three $1 billion note offerings set to mature in 2019, 2022 and 2047, as well as a $2 billion note due to mature in 2027.
Apple expects to net $4.98 billion after deducting underwriting discounts and other expenses associated with the sale. That money will go toward an ongoing capital return program expected to return $300 billion to shareholders by 2019.
By yield, Apple is offering $1 billion in 1.5 percent notes due in 2019, $1 billion in 2.1 percent notes due in 2022, $2 billion in 2.9 percent notes due in 2027 and $1 billion in 3.75 percent notes due in 2047. The company is set to pay interest on a semi-annual basis on March 12 and Sept. 12 of each year, beginning in 2018.
As noted in a prospectus filed yesterday, Goldman Sachs, Bank of America, Deutsche Bank, J.P. Morgan and Morgan Stanley are listed as joint book-running managers for the transaction.
Apple has turned to favorable debt markets instead of repatriating its gigantic offshore cash hoard to help finance its $300 billion capital return program, which by some estimates is nearly three-quarters complete. The company holds $261.5 billion in overseas cash, a figure that would be subject to America's high tax rate if repatriated.