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Apple raises $17 billion in record bond sale

Apple raises $17 billion in record bond sale

Wed 01 May 2013 7:42am GMT / 3:42am EDT / 12:42am PDT
HardwarePublishingDevelopment

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

Apple

Established in 1976, Apple is a multinational corporation (corporate headquarters based in California)...

apple.com

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.

2 Comments

Bruce Everiss Marketing Consultant

1,692 594 0.4
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.

Posted:A year ago

#1

Craig Page Programmer

390 233 0.6
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.

Posted:A year ago

#2

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