Apple Makes Preparations for $17 Billion Debt Sale for Stock Buyback Plan

On the same day that Apple reported its quarterly earnings, it also announced that it will increase its share buyback program to $130 billion and will cover that with domestic and international bond sales. Now the Financial Times is reporting that Apple is laying the groundwork for the second-biggest corporate bond sale of all time, as it plans for a blockbuster debt sale of $17 billion.

Those following the iPhone maker already know that it sits on a $150 billion cash pile, of which roughly 88%, or $130 billion, is held overseas. Returning it to the US would wipe off slightly more than a third of that money, due to tax charges, and this isn’t something investors would love to see.

As a result, Apple will proceed with the debt sale, with the foreign sale most likely targeting the eurozone, the Financial Times says, because interest rates are lower there than in the US. This would also diversify Apple’s investor base.

During the earnings call, Luca Maestri, who will replace the retiring CFO Peter Oppenheimer at the end of fiscal 2014, said that Apple will likely raise “an amount of debt financing similar to what we issued in 2013.” Apple sold stock worth $17 billion last spring.

The iPhone maker is rated AA and has a strong balance sheet, so everything is set for a huge amount of debt to be issued.