Apple Preps Bond Sale for Stock Buyback Initiative

stockbuybackAhead of last week's earnings release, Apple announced that it would more than double its capital return program from $45 billion to $100 billion, with a 15 percent increase in dividend payments and a massive stock buyback initiative.

To facilitate the expanded capital return program, which will amount to a share repurchase of $60 billion, Apple must take on debt, a process that the company initiated today. According to Reuters, Apple has begun investor calls, led by both Deutsche Bank and Goldman Sachs, and it has filed the necessary SEC paperwork for a debt offering.

The only major tech company without a penny of debt on its books, Apple stunned the markets last week by announcing it could sell debt for the first time to help fund a $100 billion capital return program for shareholders.

Any bond offer from the makers of the iconic iPhone and iPad would be highly sought after by investors, and it is believed the company could raise funds at a cheaper rate than even Triple A rated Microsoft.

Apple has a long history with both Deutsche Bank and Goldman Sachs. According to Bloomberg, the former advised Apple on its takeover of Next Computer, while the latter has been advising Apple on a cash plan. It is unknown if one of the two banks will lead the upcoming bond offering.

Though Apple has a cash pile that exceeds $145 billion, only a portion of that is available in the United States, leaving the company unable to fully fund its stock buyback. Borrowing money will allow Apple to avoid the taxes that it would incur moving money from overseas.

Popular Stories

oppo find n5 fingers

World's Thinnest Foldable Phone Launches Next Week

Monday February 10, 2025 3:05 am PST by
Oppo has confirmed a February 20 global launch for its Find N5, which the company claims is the world's thinnest device in the foldable phone category. The phone is expected to be re-branded as the OnePlus Open 2 in the US. The Chinese vendor has been teasing the device in the last few weeks, touting its waterproofing and nearly invisible display crease, and highlighting its thinness by compa...
2007 iPhone

Apple Discontinuing This 18-Year-Old iPhone Feature

Saturday February 8, 2025 3:51 pm PST by
The end of an 18-year era is on the horizon for the iPhone. Apple reportedly plans to announce a new iPhone SE as soon as next week, and the device is expected to feature a full-screen design with Face ID, instead of a Touch ID home button. That means Apple will no longer sell any new iPhone models with a home button, for the first time since the original iPhone launched. The home button...
m2 macbook air blue

M4 MacBook Air Release Continues to Appear Imminent

Monday February 10, 2025 10:56 am PST by
There continue to be signs of a new MacBook Air with an M4 chip, indicating that we could see the machine launch in the not too distant future. A private account on X today shared the identifiers that the MacBook Air will use, and those identifiers correspond to the M4 chip. According to the source, both the 13-inch MacBook Air and the 15-inch MacBook Air will be equipped with Apple's...
sequoia

Apple Releases macOS Sequoia 15.3.1

Monday February 10, 2025 10:11 am PST by
Apple today released macOS Sequoia 15.3.1, a minor update to the macOS Sequoia operating system that came out last September. macOS 15.3.1 comes a few weeks after the launch of macOS Sequoia 15.3. Mac users can download the ‌‌‌macOS Sequoia‌‌‌ update through the Software Update section of System Settings. Apple has also released macOS 13.7.4 and macOS 14.7.4 for those who are...
watchOS 11 Thumb 2 1

Apple Releases watchOS 11.3.1

Monday February 10, 2025 10:04 am PST by
Apple today released watchOS 11.3.1, a minor update to the operating system that runs on the Apple Watch. watchOS 11.3.1 is compatible with the Apple Watch Series 6 and later, all Apple Watch Ultra models, and the Apple Watch SE 2. watchOS 11.3.1 can be downloaded by opening up the Apple Watch app and going to General > Software Update. To install the new software, the Apple Watch needs to...
Powerbeats Pro 2 Orange

Powerbeats Pro 2 Given to Customer Early, Expected to Debut Tomorrow

Monday February 10, 2025 7:42 am PST by
Apple's long-awaited Powerbeats Pro 2 are finally expected to be announced this Tuesday. Ahead of time, one lucky Walmart customer was able to get their hands on the earbuds early, according to a since-deleted Reddit post over the weekend. A leaked image of the Powerbeats Pro 2 in Electric Orange "My local Walmart had them in the cage," the Reddit user explained. "I asked if I can buy them...
iOS 18

Apple Releases iOS 18.3.1 With Bug Fixes

Monday February 10, 2025 10:09 am PST by
Apple today released iOS 18.3.1 and iPadOS 18.3.1, minor updates for the iOS 18 and iPadOS 18 operating systems that came out last September. iOS 18.3.1 comes two weeks after Apple released iOS 18.3. The new software can be downloaded on eligible iPhones and iPads over-the-air by going to Settings > General > Software Update. Apple has also released iPadOS 17.7.5 for those still running...
apple silicon mac lineup 2024 feature purple

Apple Increases Mac Trade-In Values for a Limited Time

Sunday February 9, 2025 3:53 pm PST by
Apple today increased its estimated trade-in values for select Mac models in the United States, with the full changes outlined below. Apple says the extra trade-in credit for select Macs is available with the purchase of an eligible new Apple device through April 2. The trade-in values increased by between $10 and $50. Model New Value Old Value MacBook Pro Up to $925 ...
pixelmator pro apple acquisition complete

Apple Completes Pixelmator Acquisition

Tuesday February 11, 2025 9:34 am PST by
Pixelmator last year announced that it was being acquired by Apple, and today the company confirmed that the acquisition has been completed after Apple received regulatory approval. The Pixelmator for iOS, Pixelmator Pro, and Photomator apps were today updated with a new splash screen announcing the deal. Pixelmator is a well-known image and photo editing app that competes with Photoshop and ...

Top Rated Comments

jdechko Avatar
154 months ago
Sorry, but the amount of stupidity here is baffling.

1) Smart people borrow money all the time when it suits them financially Borrowing money at 2% and holding investments at 3% is better than cashing in bonds at 3% and having no debt (or borrowing at 2% and having to pay 15% in taxes). Peter Oppenheimer, CFO > Internet Armchair Accountants on MR

2) Apple is buying back stock slowly. They can't afford to completely go private, but you can bet that's where they are headed. As long as they are a public company, they are still dependent on some outside entity (stockholders). And given the current state of affairs, a bank loan is much less volatile than Apple's share price.

3) Tim Cook is the business genius to Steve's marketing/product genius. Tim Cook is the reason why Apple has $145bn in the bank. Cook is the reason why the Steve could announce the iPad at $499 instead of $999. Cook definitely isn't a product guy, no doubt. But he is a master at operations. (This is the reason why Steve Jobs recommended Cook as his successor).

Firing Tim Cook would be a huge disaster for Apple (see #3). It's what a vocal minority of the stockholders are calling for (see #2), which is why it won't happen.
Score: 6 Votes (Like | Disagree)
50548 Avatar
154 months ago
As an Apple shareholder, I am intrigued and I'm not completely convinced by this.

The moment you start taking on debt is the moment you lose your independence.

What makes this move even more moronic is the basic fact that Apple, of all companies, is the ONLY one with zero debt and zero need to borrow money.

Of course, the usual "investors" looking for a cheap buck will praise this move as the main enabler of fat dividends and artificially-higher stock prices.

Remember when SJ used to tell us how Apple had no debts whatsoever? Where is he when we need him?

Tim Cook = Michael Spindler Redux.
Score: 6 Votes (Like | Disagree)
Chupa Chupa Avatar
154 months ago
As an Apple shareholder, I am intrigued and I'm not completely convinced by this.
Convinced of what? The buyback or the borrowing to pay for it?

At any rate this is a tip of the hat to mutual, hedge, and pension fund managers who want to see some $ if they are to keep positions in AAPL.
Score: 6 Votes (Like | Disagree)
camnchar Avatar
154 months ago
Apple should just create an overseas bank and loan the money to itself.
Score: 4 Votes (Like | Disagree)
oneMadRssn Avatar
154 months ago
"..more than double its capital return program from $55 billion to $100 billion.."

Hmmm..?

haha. Math fail.
Score: 4 Votes (Like | Disagree)
SmoMo Avatar
154 months ago
"..more than double its capital return program from $55 billion to $100 billion.."

Hmmm..?
Score: 4 Votes (Like | Disagree)