Apple to Issue $1.62 Billion Debt Sale in Japan This June: Nikkei
Apple may issue 200 billion yen, or 1.62 billion US dollars, in bonds as early as June, reports Japanese news outlet Nikkei. This marks the first-ever debt sale in the country.
Actually, now is the time to make that move: interest rates are very low in Japan, says Nikkei. In addition, Apple could be in position to set the interest rate on bonds in Japan one percentage point lower than in the US, allowing the company to save on currency conversion costs.
The proceeds are projected to go toward funding its share buyback program and possibly to expand its Japanese presence.
According to Nikkei’s sources, Apple started gauging potential interest in bonds earlier this month, opening talks with banks, life insurance companies, and other institutional investors. While the iPhone maker aims to target Japanese investors, overseas investors are “invited” to participate.
While this would mark the first debt sale in Japan, it isn’t the first one for Apple: it has initiated bond sales in the US and more recently in the European Union. It is worth noting that Apple has more than $178 billion in cash, but it is cheaper for the company to borrow from the market and leave that cash pile intact.