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Apple Inc. Sells $12 Billion of Bonds to Return Capital

Apple Inc. has sold up to $12 billion in bonds in order to return capital to shareholders, making this the largest corporate debt offering in the US this year.

Apple Inc. Sells $12 Billion of Bonds to Return Capital

The company sold the securities in nine phases and according to data by Bloomberg, the longest bond has a maturity of 30 years.  The proceeds generated from the sale will go toward acquisitions and debt repayments.

The iPhone maker sold $2.5 billion of 4.65 percent bonds with a maturity of 30 years with a yield of 2.05 percent more than treasuries with the same maturity period. This is significantly lower than the initial offering of 2.15 percent on bonds with the same rating and maturity.

Apple also sold $1.5 billion of green bonds with a maturity of seven years. These include debt that supports sustainable initiatives such as clean energy.  This becomes the largest such offering  in the U.S. since the bond offering by Bank of America, which sold $600 million in green bonds in May last year.

Thomas Murphy of Minneapolis-based Columbia Threadneedle Investments said, ‘This is the exact type of deal that would take place at the reopening of the markets.’

He added, “It requires up to three days of equities being up so the markets can open to well-known, high quality liquid issuers such as the Apples and IBMs.”

This is Apple’s fifth multibillion-dollar sale since 2013. In May, the company issued bonds worth $8billion to increase shareholder capital.

The deal follows the reopening of the market after a week that saw the freezing of corporate bond issuance as concerns about the wellbeing of the global economy increased. 

Tuesday saw Toyota Motor Credit, the financing subsidiary of the largest car manufacturer in Asia, and IBM announce plans to sell bonds to shareholders. 

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