Apple working on first Taiwanese bond sale, new Australian bond offering

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in AAPL Investors
Apple is exploring a new bond sale in Australia in light of a successful offering last year, and is also looking at launching its first-ever Taiwanese bonds, a report said on Wednesday.




For Australia, the company has hired the Australia & New Zealand Banking Group, Deutsche Bank, and Goldman Sachs, two sources informed Bloomberg. The sale is expected to take place in the near future, but the exact timing will naturally be subject to market conditions.

The Taiwanese venture will involve 30-year bonds in U.S. currency, separate sources said. Although they didn't mention a timeframe, Apple is reportedly aiming at a volume of $800 million to $1.2 billion, and a yield of approximately 4.2 percent.

The company has launched a number of bond offerings around the world in recent years, which have helped to finance share buybacks and dividends without taking a deep bite into the company's cash reserves, now up to $233 billion. Most of that -- $209 billion -- is stashed outside the U.S., since the company has refused to repatriate the money without a lower tax rate.

New bond offerings would presumably continue this trend. In the past year alone Apple has paid out tens of billions to investors, including $2.9 billion in dividends that were due May 12.

Comments

  • Reply 1 of 7
    crowleycrowley Posts: 5,613member
    Would be interesting to know the total accumulated debt now.
  • Reply 2 of 7
    crowleycrowley Posts: 5,613member
    sog35 said:
    crowley said:
    Would be interesting to know the total accumulated debt now.
    About $80 billion as of the end of March
    Thanks.  That figure should really be in the article. If you're going to make a thing of Apples cash pile as an asset then the liabilities are also an important bit of information.
    edited June 2016 cnocbuianantksundaramjony0
  • Reply 3 of 7
    MacProMacPro Posts: 17,835member
    crowley said:
    sog35 said:
    About $80 billion as of the end of March
    Thanks.  That figure should really be in the article. If you're going to make a thing of Apples cash pile as an asset then the liabilities are also an important bit of information.
    It was explained a few days ago in here on AI in a way I (just about)  understood that this money is so cheap for Apple it enables share buy backs, thus reducing dividends netting actual gains. Not sure if it's that simple that was my take away. 
    edited June 2016 ai46
  • Reply 4 of 7
    cwingravcwingrav Posts: 77member
    crowley said:
    Thanks.  That figure should really be in the article. If you're going to make a thing of Apples cash pile as an asset then the liabilities are also an important bit of information.
    It was explained a few days ago in here on AI in a way I (just about)  understood that this money is so cheap for Apple it enables share buy backs, thus reducing dividends netting actual gains. Not sure if it's that simple that was my take away. 
    That's an interesting point. If you forget inflation for a moment, and assume their dividend is about 2% a share with a 4% interest rate on a bond, then you can see buying back their shares (reducing the dividend payed) pays for itself in a few years time. Awesome. Ah, compound interest and big numbers.
    patchythepirateai46
  • Reply 5 of 7
    MacProMacPro Posts: 17,835member
    cwingrav said:
    It was explained a few days ago in here on AI in a way I (just about)  understood that this money is so cheap for Apple it enables share buy backs, thus reducing dividends netting actual gains. Not sure if it's that simple that was my take away. 
    That's an interesting point. If you forget inflation for a moment, and assume their dividend is about 2% a share with a 4% interest rate on a bond, then you can see buying back their shares (reducing the dividend payed) pays for itself in a few years time. Awesome. Ah, compound interest and big numbers.
    I don't begin to try to understand all this, I have many accountant friends and they don't even seem to be able to.  All I know is my mantra is 'Please AAPL stay above 100 until I fully retire".  We bought low enough that our dream was always to one day reach $700  (pre split) and that's where we are roughly at now so here's hoping!  
    edited June 2016 patchythepirateai46
  • Reply 6 of 7
    volcanvolcan Posts: 1,749member
    AppleInsider said:
    The Taiwanese venture will involve 30-year bonds in U.S. currency, 
    The article doesn't mention what currency the Australian bond sale is, however selling bonds in a foreign market in a different currency is called Eurobonds. The case of Taiwan it would be EuroDollar. The term EuroBond has nothing to do with the EU it is just a word to describe selling bonds in a foreign country in some other currency than that country. This can bring US currency to Apple in the US and because it is not profit or earned income it is not taxed. Then they can use that to buy back shares and pay dividends, or whatever else they want to use it for in the US.
    edited June 2016
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