Apple reaps $7 billion after finalizing latest bond sale
Apple has completed an anticipated five-part bond sale, raising $7 billion in debt with the help of banks including Goldman Sachs, Merrill Lynch, J.P. Morgan, and Deutsche Bank.
The first part, $350 million, will mature in 2019 with a floating interest rate linked to a three-month LIBOR (London Interbank Offered Rate) plus 14 basis points, according to a U.S. Securities and Exchange Commission filing. The second, worth $1.15 billion, will mature the same year with a fixed 1.1 interest rate.
A $1.25 billion round matures in 2021 with 1.55 percent interest, while the biggest part -- $2.25 billion -- is set to mature in 2026 with 2.45 percent interest. The final $2 billion will only mature in 2046, but with 3.85 percent interest.
Apple has used a number of bond sales to help finance its capital return program for investors, increasing the appeal of shares through dividends and buybacks. The company could theoretically fuel the program through its cash reserves -- now totaling over $231.5 billion -- but most of that money is overseas, and the company has refused to repatriate it unless the U.S. government concedes to a "tax holiday" that will shrink the amount it owes.
Apple is ultimately expecting to reach $250 billion in the capital return program by March 2018, having already paid out over $163 billion.
The first part, $350 million, will mature in 2019 with a floating interest rate linked to a three-month LIBOR (London Interbank Offered Rate) plus 14 basis points, according to a U.S. Securities and Exchange Commission filing. The second, worth $1.15 billion, will mature the same year with a fixed 1.1 interest rate.
A $1.25 billion round matures in 2021 with 1.55 percent interest, while the biggest part -- $2.25 billion -- is set to mature in 2026 with 2.45 percent interest. The final $2 billion will only mature in 2046, but with 3.85 percent interest.
Apple has used a number of bond sales to help finance its capital return program for investors, increasing the appeal of shares through dividends and buybacks. The company could theoretically fuel the program through its cash reserves -- now totaling over $231.5 billion -- but most of that money is overseas, and the company has refused to repatriate it unless the U.S. government concedes to a "tax holiday" that will shrink the amount it owes.
Apple is ultimately expecting to reach $250 billion in the capital return program by March 2018, having already paid out over $163 billion.
Comments
Yes, you read that right, "negative interest rates"! People are actually pulling their money out of their savings accounts and putting it in secure storage. That is how screwed up the EU is right now.
Any links on that?
Its a strong incentive for me not to buy Apple products anymore.
http://www.cnbc.com/2016/06/10/negative-interest-rates-by-ecb-boj-cant-boost-growth-allianz-says.html
And Japan has joined in on the madness:
http://www.bloomberg.com/news/articles/2016-01-29/bank-of-japan-s-negative-interest-rate-decision-explained
And the dangerous idiot currently heading the Fed (after dangerous idiot Ben Bernanke left) is thinking of bringing it the US:
http://money.cnn.com/2016/02/11/news/economy/negative-interest-rates-janet-yellen/index.html
Couple of additional points you should consider: removing cash does not "...leave the market cap where it is"; if debt is used (as Apple is doing), interest and principal has to be paid on it from pre-tax operating cash flow.
You should bone up on some econ.