Apple-BondsApple has raised $7 billion in debt through a five-part bond sale of both fixed and floating rate notes, according to the company's final pricing term sheet filed with the U.S. Securities and Exchange Commission on Friday.

The five-part sale includes:

  • $350 million maturing in 2019 with a floating interest rate based on three month LIBOR plus 14 basis points

  • $1.15 billion maturing in 2019 with a fixed 1.1% interest rate

  • $1.25 billion maturing in 2021 with a fixed 1.55% interest rate

  • $2.25 billion maturing in 2026 with a fixed 2.45% interest rate

  • $2 billion maturing in 2046 with a fixed 3.85% interest rate

The transaction was underwritten by Goldman Sachs, J.P. Morgan Securities, MLPF&S, and Deutsche Bank Securities, among others.

Apple held $231.5 billion in cash and marketable securities, partially offset by $68.9 billion in long-term debt, as of the fiscal third quarter, but a significant portion of that money is held overseas and would be subject to high U.S. taxes upon repatriation. By raising debt through bonds, Apple can pay for its U.S. operations at a much lower rate, particularly given its low-risk Aa1/AA+ bond credit rating.

Apple typically uses the capital raised to fund dividend payments to shareholders and its share buyback program, which the company expanded to $175 billion in April. At the time, Apple said it expects to spend over $250 billion in cash under its capital return program by the end of March 2018. It also uses the capital for general corporate purposes, such as the repayment of earlier debt and acquisitions.

Tags: Bonds, SEC

Top Rated Comments

neuropsychguy Avatar
122 months ago
The wonders of capitalism. Cheaper to borrow money than spend your own savings.
That isn't because of capitalism (only). It's an issue of much of Apple's cash being "stuck" outside the U.S. because of less than ideal U.S. tax laws. Corporate taxes, some people argue, are the opposite of capitalism (or at least interfere with capitalism). A common definition of capitalism is: "an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state". With that in mind, one can argue that it's cheaper for Apple to borrow money because of statist/socialist/communist economic policies instituted by the federal government. A purely capitalistic society would have no business taxes. It would then be cheaper for Apple to bring the money back to the U.S. rather than borrow.

Anyway, that's enough politico-economic discussion from me today.
Score: 6 Votes (Like | Disagree)
CFreymarc Avatar
122 months ago
The wonders of capitalism. Cheaper to borrow money than spend your own savings.
When we stop punishing the productive by higher tax rates, the this craziness will stop.
Score: 5 Votes (Like | Disagree)
GadgetSN Avatar
122 months ago
The wonders of capitalism. Cheaper to borrow money than spend your own savings.
Score: 3 Votes (Like | Disagree)
Rocketman Avatar
122 months ago
People often complain about Apple using different jusrisdictions to reduce tax owed. Apple operates in a whole bunch of countries. Some for manufacturing employment, some for retail, some for distribution, and some for IP. Perfectly normal activity. The complainers are wrong, but . . .

The complainers want to bring it back for the purpose of taxing it. The current capital gains tax here is 23.8%. The income tax around 45% including state and federal, and "Obamacare" add-ons. They want more tax, not more investment. Where it is now, it is providing more investment with minimal taxation. In order to use it in the USA where they want they have been taking out massive loans, about $70B against those assets in various currencies, to invest the loan proceeds in the USA which is legal without taxation. The cost of course is the massive interest they pay on an absolute basis, if not a relative basis. That is a cost.

The good news from all this is Apple has learned to bypass wacky US Federal tax laws to be able to invest MORE in the USA than they otherwise could.

New balance: $75.9B

About 1/6 short term, 1/6 5 year, 1/3 10 year and 1/3 30 year overall. So it will roll off over the next several years to a notable degree. The return on average assets is currently 10.24%, so the payment is fully covered by growth.

Time for more GBP bonds.
Score: 2 Votes (Like | Disagree)
ArtOfWarfare Avatar
122 months ago
I see the year 2046 in this article... doesn't that make the assumption that Apple will still be around in 2046?

2019 and 2021 seem like safe guesses that Apple won't vanish before then. 2026 doesn't seem unreasonable... although 10 years is a long time in tech. 2046? That gives us enough time that a company that hasn't even formed yet somehow undoes Apple.

By 2046, the singularity may have occurred already.
Score: 2 Votes (Like | Disagree)
Reader999 Avatar
122 months ago
I'm not a financial expert but it seems like Apple's stock is very undervalued. They're basically putting billions back into the stock in buy-backs and dividends and stock is trading very low as a part of EPS compared to other tech companies. It's like wall street is constantly in this mode of "apple is 6 weeks away from dying" and afraid to go in big. the stock split didn't help, ASP of the iPad and iPhone didn't help, buy backs aren't helping, dividends might be helping but not in a huge way.

Where is the pro-AAPL discussion? Or is them taking on massive debt despite their overseas holdings causing more problems for them in stock price because investors see the bonds as a liability?
From the corporate finance perspective, raising debt gives positive signaling than raising capital through equity. Raising debt is a good thing for Apple if they can keep up its growth (assuming Apple Car). This will increase its financial leverage and tax shield. It is cheaper to borrow debts than issue more equities because debts - bonds only require a marginal premium above TBill due to its AA rating, but equity holder will require much more return to their cash than bonds holders.
Score: 1 Votes (Like | Disagree)

Popular Stories

iOS 26

iOS 26.4 and iOS 27 Features Revealed in New Leak

Friday December 12, 2025 10:56 am PST by
Macworld's Filipe Espósito today revealed a handful of features that Apple is allegedly planning for iOS 26.4, iOS 27, and even iOS 28. The report said the features are referenced within the code for a leaked internal build of iOS 26 that is not meant to be seen by the public. However, it appears that Espósito and/or his sources managed to gain access to it, providing us with a sneak peek...
iOS 26

iOS 26.2 Coming Soon With These 8 New Features on Your iPhone

Thursday December 11, 2025 8:49 am PST by
Apple seeded the second iOS 26.2 Release Candidate to developers earlier this week, meaning the update will be released to the general public very soon. Apple confirmed iOS 26.2 would be released in December, but it did not provide a specific date. We expect the update to be released by early next week. iOS 26.2 includes a handful of new features and changes on the iPhone, such as a new...
iOS 26

Apple Releases iOS 26.2 With Alarms for Reminders, Lock Screen Changes, Enhanced Safety Alerts and More

Friday December 12, 2025 10:10 am PST by
Apple today released iOS 26.2, the second major update to the iOS 26 operating system that came out in September, iOS 26.2 comes a little over a month after iOS 26.1 launched. ‌iOS 26‌.2 is compatible with the ‌iPhone‌ 11 series and later, as well as the second-generation ‌iPhone‌ SE. The new software can be downloaded on eligible iPhones over-the-air by going to Settings >...
AirPods Pro Firmware Feature

Apple Releases New Firmware for AirPods Pro 2 and AirPods Pro 3

Thursday December 11, 2025 11:28 am PST by
Apple today released new firmware designed for the AirPods Pro 3 and the prior-generation AirPods Pro 2. The AirPods Pro 3 firmware is 8B30, up from 8B25, while the AirPods Pro 2 firmware is 8B28, up from 8B21. There's no word on what's include in the updated firmware, but the AirPods Pro 2 and AirPods Pro 3 are getting expanded support for Live Translation in the European Union in iOS...
macOS Tahoe 26 Thumb

Apple Releases macOS Tahoe 26.2 With Edge Light

Friday December 12, 2025 10:08 am PST by
Apple today released macOS Tahoe 26.2, the second major update to the macOS Tahoe operating system that came out in September. macOS Tahoe 26.2 comes five weeks after Apple released macOS Tahoe 26.1. Mac users can download the macOS Tahoe update by using the Software Update section of System Settings. macOS Tahoe 26.2 includes Edge Light, a feature that illuminates your face with soft...
AirTag 2 Mock Feature

Apple AirTag 2: Four New Features Found in iOS 26 Code

Thursday December 11, 2025 10:31 am PST by
The AirTag 2 will include a handful of new features that will improve tracking capabilities, according to a new report from Macworld. The site says that it was able to access an internal build of iOS 26, which includes references to multiple unreleased products. Here's what's supposedly coming: An improved pairing process, though no details were provided. AirTag pairing is already...
ipados 26 1 slide over

Apple Releases iPadOS 26.2 With Multitasking Improvements

Friday December 12, 2025 10:09 am PST by
Apple today released iPadOS 26.2, the second major update to the iPadOS 26 operating system released in September. iPadOS 26.2 comes a month after iPadOS 26.1. The new software can be downloaded on eligible iPads over-the-air by going to Settings > General > Software Update. iPadOS 26.2 continues with the multitasking improvements that were added with iPadOS 26.1. You can now drag and...
bug security vulnerability issue fix larry

Update Now: iOS 26.2 Fixes 20+ Security Vulnerabilities

Friday December 12, 2025 11:11 am PST by
Apple today released iOS 26.2, iPadOS 26.2, and macOS 26.2, all of which introduce new features, bug fixes, and security improvements. Apple says that the updates address over 20 vulnerabilities, including two bugs that are known to have been actively exploited. There are a pair of WebKit vulnerabilities that could allow maliciously crafted web content to execute code or cause memory...