Apple issues $8B bond sale as debt market nears all-time low

Apple on Monday launched its latest debt deal to fund corporate operations like share buybacks and dividends, with reports claiming the offering stands at $8 billion.

The Cupertino tech giant plans to issue notes that mature in 2023, 2025, 2030 and 2050, according to a preliminary prospectus issued to the Securities and Exchange Commission. Goldman Sachs, Bank of America Securities, JPMorgan and Morgan Stanley are listed as underwriters on the debt deal.

Citing a source at a financial institution, CNBC reports Apple is looking to sell $8 billion in debt as 10 year yields hovers near an all-time low of 0.637%.

Apple is offering $2 billion in 0.75% notes set to mature in 3 years, $2.25 billion in 1.125% notes due in 5 years, $1.75 billion in 1.65% notes maturing in 10 years, and $2.5 billion in 2.65% notes due in 30 years.

Apple in its filing did not specify how much it is trying to raise but said that the proceeds would be used for general corporate purchases, including share buybacks, dividends, working capital, acquisitions and to repay debt.

The company last offered bonds in September 2019, also for general corporate purchases.

Shares of Apple were trading at $293.16 on Monday, up 1.41% on the day.

23 Comments

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apple ][ 13 Years · 9225 comments

About 4 years ago

I know very little about bonds, but I admit that I don't understand fully how they work.

Look at the interest rate for the 3 year note, it's 0.75%?

So somebody who invests in that bond will only get 0.75% after parking their money for 3 years? Does that sound worthwhile?

Why don't they just take their money and park it in a bank account or something that will grant them a lot higher interest rate than 0.75%?

Institutions who have billions laying around to invest, why don't they just invest in AAPL stock and make a killing instead of a lousy 0.75% after tying up their money for many years?

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aaarrrgggh 18 Years · 1607 comments

About 4 years ago

apple ][ said:

Institutions who have billions laying around to invest, why don't they just invest in AAPL stock and make a killing instead of a lousy 0.75% after tying up their money for many years?

Because generations of people have been told to invest in bonds and fixed income as they get closer to retirement. Beyond that... it makes no sense, but fighting that idea is a fools errand.

But you are not going to find 0.75% interest in a savings account right now. (You will of course get more than that in dividends alone from Apple stock though.)

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apple ][ 13 Years · 9225 comments

About 4 years ago

aaarrrgggh said:

But you are not going to find 0.75% interest in a savings account right now. (You will of course get more than that in dividends alone from Apple stock though.)

Many banks offer more than 0.75% at the moment.

Ally for example has 1.50% currently in their regular savings account.

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Rayz2016 8 Years · 6957 comments

About 4 years ago

apple ][ said:

I know very little about bonds, but I admit that I don't understand fully how they work.

Look at the interest rate for the 3 year note, it's 0.75%?

So somebody who invests in that bond will only get 0.75% after parking their money for 3 years? Does that sound worthwhile?

Why don't they just take their money and park it in a bank account or something that will grant them a lot higher interest rate than 0.75%?

Institutions who have billions laying around to invest, why don't they just invest in AAPL stock and make a killing instead of a lousy 0.75% after tying up their money for many years?

If you’re sitting on a pile of cash that you don’t need for a few years, what would you do with it?

Buy AAPL stock – like any stock, there’s a risk that it could be worth less than you paid for it when you need to get the cash back?

You could park it in a bank account but to be honest, but Looking at the way the banking system is run, Apple is less likely to go bust.

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gatorguy 13 Years · 24634 comments

About 4 years ago

Question:
If Apple has "repatriated" and paid the (relatively) minimal corporate taxes due that Apple lobbied for and as has been reported they did, why would they issue bonds at all for repurchasing stock. Simply pay with the cash on hand already taxed. The obvious answer is they have not either repatriated it or paid any taxes on it.
They can't use it for stock repurchases.