Apple BondsAs Apple prepares to launch a new line of iPhones next week, the company is selling another round of bonds to further fund share buybacks and dividends, reports Bloomberg. Apple plans to offer $5 billion of debt in four parts to raise cash for its current capital return program.

The iPhone maker is offering $5 billion of debt in four parts, after dropping a two-year floating rate component, according to a person with knowledge of the matter. The longest portion of the sale, a 30-year security, may yield 1.1 percentage points above Treasuries, down from initial talk of around 1.25 percentage points, said the person, who asked not to be identified because the deal is private.

In August, Apple CFO Luca Maestri said Apple had completed $222.9 billion of its $300 billion capital return program, which is set to last through 2019. That figure includes $158.5 billion in share repurchases.

At the beginning of July Apple held over $261.5 billion in cash and marketable securities, but approximately 94 percent of that money is held overseas. It would cost Apple upwards of 35 percent in taxes to repatriate its overseas cash, so Apple uses debt markets to raise money more cheaply.

Apple's upcoming bond sale follows $7 billion in debt raised in a six-part bond sale in May of 2017.

Tag: Bonds

Top Rated Comments

jimthing Avatar
95 months ago
This is not a criticism, well ... perhaps just a bit :) Steve Jobs was all about "no debt, don't listen to irate investors", while Tim has embraced debt issues to appease investors. Personally, I liked Steve's approach much better, since it aligns with my own perspectives.
That may be a short term issue for a growing company during Jobs' period. But established ones holding large capital reserves don't have this issue, as clearly borrowing is cheaper than the tax bill.

It'd be silly to bring money into the US and pay 35%+ on it, when you can lend at a fraction of that rate.
Score: 7 Votes (Like | Disagree)
john123 Avatar
95 months ago
This is not a criticism, well ... perhaps just a bit :) Steve Jobs was all about "no debt, don't listen to irate investors", while Tim has embraced debt issues to appease investors. Personally, I liked Steve's approach much better, since it aligns with my own perspectives.
The criticisms of debt financing in the literature don't really apply in this case. That's why net debt, which takes into account cash and cash equivalents, is a better measure.
Score: 3 Votes (Like | Disagree)
luvbug Avatar
95 months ago
This is not a criticism, well ... perhaps just a bit :) Steve Jobs was all about "no debt, don't listen to irate investors", while Tim has embraced debt issues to appease investors. Personally, I liked Steve's approach much better, since it aligns with my own perspectives.
Score: 3 Votes (Like | Disagree)
RogerWilco Avatar
95 months ago
Nothing says Sillycon Valley ethos like a debt-funded share repurchase plan. Modern, sanitary, and totally bereft of any benefit to the mass of humanity living outside the bubble.
Score: 2 Votes (Like | Disagree)

Popular Stories

New Things Your iPhone Can Do in iOS 18

20 New Things Your iPhone Can Do in iOS 18.2

Monday December 16, 2024 8:55 am PST by
Apple released iOS 18.2 in the second week of December, bringing the second round of Apple Intelligence features to iPhone 15 Pro and iPhone 16 models. This update brings several major advancements to Apple's AI integration, including completely new image generation tools and a range of Visual Intelligence-based enhancements. Apple has added a handful of new non-AI related feature controls as...
iphone 16 apple intelligence

Apple Drops Plans for iPhone Hardware Subscription Service

Wednesday December 18, 2024 11:39 am PST by
Apple is no longer planning to launch a hardware subscription service that would let customers "subscribe" to get a new iPhone each year, reports Bloomberg's Mark Gurman. Gurman first shared rumors about Apple's work on a hardware subscription service back in 2022, and at the time, he said that Apple wanted to develop a simple system that would allow customers to pay a monthly fee to gain...
iPhone 17 Pro Dual Tone Feature 1

iPhone 17 Pro Rumored to Stick With 'Triangular' Camera Design

Wednesday December 18, 2024 2:36 am PST by
Contrary to recent reports, the iPhone 17 Pro will not feature a horizontal camera layout, according to the leaker known as "Instant Digital." In a new post on Weibo, the leaker said that a source has confirmed that while the appearance of the back of the iPhone 17 Pro has indeed changed, the layout of the three cameras is "still triangular," rather than the "horizontal bar spread on the...
elevation lab airtag battery

Your AirTag's Battery Will Last for Up to 10 Years With Elevation Lab's New TimeCapsule Enclosure

Wednesday December 18, 2024 10:05 am PST by
Elevation Lab today announced the launch of TimeCapsule, an innovative and simple solution for increasing the battery life of Apple's AirTag. Priced at $20, TimeCapsule is an AirTag enclosure that houses two AA batteries that offer 14x more battery capacity than the CR2032 battery that the AirTag runs on. It works by attaching the AirTag's upper housing to the built-in custom contact in the...
apple tv 4k yellow bg feature

New Apple TV Rumored to Launch Next Year With These Features

Tuesday December 17, 2024 9:02 am PST by
The current Apple TV 4K was released more than two years ago, so the streaming device is becoming due for a hardware upgrade soon. Fortunately, it was recently rumored that a new Apple TV will launch at some point next year. Below, we recap rumors about the next-generation Apple TV. Bloomberg's Mark Gurman last week reported that Apple has been working on its own combined Wi-Fi and...
blackmagic vision pro

Blackmagic Debuts $30K 3D Camera for Capturing Video for Vision Pro

Monday December 16, 2024 4:17 pm PST by
Blackmagic today announced that its URSA Cine Immersive camera is now available for pre-order, with deliveries set to start late in the first quarter of 2025. Blackmagic says that this is the world's first commercial camera system designed to capture 3D content for the Vision Pro. The URSA Cine Immersive camera was first introduced in June, but it has not been available for purchase until...
mac pro creativity

Apple Launched the Controversial 'Trashcan' Mac Pro 11 Years Ago Today

Thursday December 19, 2024 7:00 pm PST by
Apple launched the controversial "trashcan" Mac Pro eleven years ago today, introducing one of its most criticized designs that persisted through a period of widespread discontentment with the Mac lineup. The redesign took the Mac Pro in an entirely new direction, spearheaded by a polished aluminum cylindrical design that became unofficially dubbed the "trashcan" in the Mac community. All of ...
iPhone 17 Slim Feature

'iPhone 17 Air' With 'Major' Design Changes and 19-Inch MacBook Detailed in New Report

Sunday December 15, 2024 9:47 am PST by
Apple is planning a series of "major design" and "format changes" for iPhones over the next few years, according to The Wall Street Journal's Aaron Tilley and Yang Jie. The paywalled report published today corroborated the widely-rumored "iPhone 17 Air" with an "ultrathin" design that is thinner than current iPhone models. The report did not mention a specific measurement, but previous...