Apple Planning to Raise Billions in Bond Market to Boost Shareholder Returns
In an effort to boost shareholder returns, Apple has filed plans to raise billions in the bond market with a new sale in as many as four parts, Bloomberg is reporting. The longest portion of the offering, a 40-year security, may yield 1.15 percentage points above Treasuries, notes the source.
In papers filed with the SEC, Apple said the proceeds from the sale will be used for general corporate purposes, including share repurchases, dividend payments, funding for capital expenditures, and acquisitions.
Apple is rated Aa1 by Moody’s Investors Service, its second-highest grade, while Standard & Poor’s rates the tech giant at AA+. Only Microsoft and Johnson & Johnson, both triple-A credits, have a higher rating than Apple.
“As Apple’s debt continues to climb, we anticipate net cash to fall by more than $70 billion over the next few years, after cash had declined by $91 billion since the company initiated a more aggressive shareholder-return policy in 2018,” Bloomberg Intelligence analyst Robert Schiffman wrote Thursday.
In its most recent earnings report, Apple reported profit that nearly doubled and record revenue, boosted by strong iPhone sales.