The fundraising is the first time the company has sold debt in 17 years and comes a week after it announced a record share buyback worth $60bn. Although Apple has a colossal cash pile, most of it is based outside of the US and would incur a substantial tax payment were it to be brought back. With borrowing rates at historic lows, the firm has decided it is cheaper to raise funds through debt.
The bond sale was massively oversubscribed, with runners Goldman Sachs and Deutsche Bank seeing demand for the notes hit $50bn, and the $17bn offering pips the $16.5bn sold by Swiss pharmaceuticals firm Roche in 2009, making it the biggest ever corporate issue. The bonds range from three to 30 years.
The sale comes a week after chief executive Tim Cook made an aggressive bid to keep investors happy by boosting Apple’s three-year capital return programme to $100bn. This is made up of a
$60bn share buyback – which the company said was the biggest in history – as well as a 15 per cent rise in its dividend.
When Cook announced the capital return last week, Apple’s stock was trading at $400, down from September’s $700. It has since clawed back some ground, rising 10 per cent in the last week.