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Apple raises $17 billion in record bond sale

Low interest rates guide Apple's hand in attempt to satisfy investors

Apple has raised $17 billion through the largest non-bank bond sale in history.

The move is part of a larger plan to return around $100 billion to its shareholders in dividends and buybacks by 2015. The $17 billion in bonds - the only debt on Apple's books - will be issued in six parts, with maturities ranging from 3 to 30 years.

In reality, Apple's $145 billion cash pile is more than enough to meet that target. However, all but $45 billion of that money is held outside America, and repatriation taxes would be more costly than the current interest rates on borrowing money, which are at a record low. Effectively, it's cheaper for Apple to borrow money than give it away.

The bond sale should also have a stabilising effect on Apple's share price, which has tumbled by nearly half since it hit last September's high of $705. Concerns over future growth were a big part of that decline, but so was the growing dissatisfaction among shareholders at Apple's apparent reticence to share its record profits, leading many to sell their stock.

Thanks, Bloomberg.

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Latest comments (2)

Bruce Everiss Marketing Consultant 3 years ago
Would Steve Jobs have done this?
I just don't see where Apple are going now. And judging by the share price I am not the only one.
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Craig Page El Presidente, Awesome Enterprises3 years ago
Why doesn't the government set a lower tax rate for returning foreign profits to the country? 35% equals 0% if corporations just keep all of their foreign profits in foreign bank accounts.
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