Apple issues $7B U.S. bond to fund stock buybacks, corporate initiatives

Posted:
in AAPL Investors
In a filing made to the U.S. Securities and Exchange Commission on July 28 made public on Thursday, Apple detailed its latest $7 billion bond sale in the U.S. marketplace.




The joint book running managers for this bond sale listed in the SEC filing are Goldman Sachs, J.P. Morgan Securities, and Merrill Lynch. Bank of America is not participating in any way with this offering, but was listed as a fund manager during the last sale.

Other issuers are Deutsche Bank, Barclays Capital, Citigroup, Standard Chartered, Wells Fargo, Lebenthal & Co., Loop Capital Markets, Mischler Financial Group, and The Williams Capital Group.

The sale is said to be three-times over subscribed, and will happen in five parts. Two notes mature in 2019 and are worth $1.5 billion combined, with $1.25 billion maturing in 2021, $2.25 billion maturing in 2026, and $2 billion concluding in 2046.

The last US offer was a $12 billion effort in February 2016, with a "Green bond" issue for $1.5 billion to finance clean energy projects. The last international sale was in Taiwan, and generated $1.38 billion in 30-year bonds, 40 percent more than originally expected.

Bond sales in 2015 generated $8 billion for Apple. In April 2016, the company claimed that the capital return program funded in part by the bond sales, has returned more than $163 billion to investors since its activation in August 2012. Share repurchases accounted for $117 billion of the $163 billion.

Apple plans on spending $58 billion in the span of the next two years on stock buyback programs, financed in part by these bond sales.

Comments

  • Reply 1 of 13
    What's the schedule for paying all these bonds back ? Apple has raised an awful lot of money but eventually the bond holders will need to be paid back.
  • Reply 2 of 13
    SpamSandwichSpamSandwich Posts: 31,490member
    What's the schedule for paying all these bonds back ? Apple has raised an awful lot of money but eventually the bond holders will need to be paid back.
    In case it's not clear, Apple can rack up $7 billion in profits in no time flat.
    latifbp
  • Reply 3 of 13
    Mike WuertheleMike Wuerthele Posts: 4,967administrator
    And, they can pay off with overseas cash.
  • Reply 4 of 13
    latifbplatifbp Posts: 544member
    What's the schedule for paying all these bonds back ? Apple has raised an awful lot of money but eventually the bond holders will need to be paid back.
    In case it's not clear, Apple can rack up $7 billion in profits in no time flat.
    Just last quarter 
    jbdragon
  • Reply 5 of 13
    crowleycrowley Posts: 6,057member
    What's the schedule for paying all these bonds back ? Apple has raised an awful lot of money but eventually the bond holders will need to be paid back.
    They vary, some are just a few years, others are 10 or 20 years until maturity. I believe Apple have already paid off the earliest bond issue with the shortest term.

    And, they can pay off with overseas cash.
    No they can't, unless they repatriate that cash. The bonds were issued by Apple Inc in the USA, so must be repaid by that same entity. Otherwise that would be blatant tax evasion.
    edited August 2016 jbdragon
  • Reply 6 of 13
    And, they can pay off with overseas cash.
    No, they can't. That would be a 'deemed repatriation.'

    (Ah, @crowley beat me to it...)
    edited August 2016 jbdragon
  • Reply 7 of 13
    latifbplatifbp Posts: 544member
    They use that cacrowley said:
    What's the schedule for paying all these bonds back ? Apple has raised an awful lot of money but eventually the bond holders will need to be paid back.
    They vary, some are just a few years, others are 10 or 20 years until maturity. I believe Apple have already paid off the earliest bond issue with the shortest term.

    No they can't, unless they repatriate that cash. The bonds were issued by Apple Inc in the USA, so must be repaid by that same entity. Otherwise that would be blatant tax evasion.
    sh to pay debt they've taken at low interest rates which helps them delay bringing that cash back, don't they?
  • Reply 8 of 13
    crowleycrowley Posts: 6,057member
    latifbp said:
    They use that cacrowley said:
    They vary, some are just a few years, others are 10 or 20 years until maturity. I believe Apple have already paid off the earliest bond issue with the shortest term.

    No they can't, unless they repatriate that cash. The bonds were issued by Apple Inc in the USA, so must be repaid by that same entity. Otherwise that would be blatant tax evasion.
    sh to pay debt they've taken at low interest rates which helps them delay bringing that cash back, don't they?
    What debt?  An Apple legal entity in one country cannot pay the debts of another Apple legal entity in a different country.
  • Reply 9 of 13
    latifbplatifbp Posts: 544member
    crowley said:
    latifbp said:
    They use that cacrowley said: sh to pay debt they've taken at low interest rates which helps them delay bringing that cash back, don't they?
    What debt?  An Apple legal entity in one country cannot pay the debts of another Apple legal entity in a different country.
    You're not aware that Apple is taking on debt here rather than repatriating their overseas cash?
    jbdragon
  • Reply 10 of 13
    crowleycrowley Posts: 6,057member
    latifbp said:
    crowley said:
    What debt?  An Apple legal entity in one country cannot pay the debts of another Apple legal entity in a different country.
    You're not aware that Apple is taking on debt here rather than repatriating their overseas cash?
    I'm aware that they're taking on debt, but not which particular debt you're referring to, or which cash, or which subsidiary or holding company is the owner of the undefined debt or cash.

    As I said, whichever debt and cash you're referring to, Apple's subsidiaries in one country cannot directly pay the debts of another subsidiary or the mother company.
  • Reply 11 of 13
    latifbplatifbp Posts: 544member
    crowley said:
    latifbp said:
    You're not aware that Apple is taking on debt here rather than repatriating their overseas cash?
    I'm aware that they're taking on debt, but not which particular debt you're referring to, or which cash, or which subsidiary or holding company is the owner of the undefined debt or cash.

    As I said, whichever debt and cash you're referring to, Apple's subsidiaries in one country cannot directly pay the debts of another subsidiary or the mother company.
    Are you really that eager to go there again? 
  • Reply 12 of 13
    crowleycrowley Posts: 6,057member
    latifbp said:
    crowley said:
    I'm aware that they're taking on debt, but not which particular debt you're referring to, or which cash, or which subsidiary or holding company is the owner of the undefined debt or cash.

    As I said, whichever debt and cash you're referring to, Apple's subsidiaries in one country cannot directly pay the debts of another subsidiary or the mother company.
    Are you really that eager to go there again? 
    No idea what you're talking about, or why you're disliking my posts; I'm just telling you my understanding of the situation.
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