Apple has raised $10 billion in debt through a nine-part bond sale of both fixed and floating rate notes, according to the company's final pricing term sheet filed with the U.S. Securities and Exchange Commission on Friday.
The nine-part sale includes:
- $500 million maturing in 2019 with a floating interest rate based on three month LIBOR plus 8 basis points
- $500 million maturing in 2020 with a floating interest rate based on three month LIBOR plus 20 basis points
- $1 billion maturing in 2022 with a floating interest rate based on three month LIBOR plus 50 basis points
- $500 million maturing in 2019 with a fixed 1.55% interest rate
- $1 billion maturing in 2020 with a fixed 1.9% interest rate
- $1.5 billion maturing in 2022 with a fixed 2.5% interest rate
- $1.75 billion maturing in 2024 with a fixed 3% interest rate
- $2.25 billion maturing in 2027 with a fixed 3.35% interest rate
- $1 billion maturing in 2047 with a fixed 4.25% interest rate
Apple held $246.1 billion in cash and marketable securities last quarter, but around 94% of that money is held overseas and would be subject to high U.S. taxes upon repatriation—something U.S. President Donald Trump plans to change. In the meantime, by raising debt through bonds, Apple can pay for its U.S. operations at a much lower rate, particularly given its low-risk Aa1/AA+ bond credit rating.
Apple typically uses the capital raised to fund dividend payments to shareholders and its share buyback program. Last quarter, Apple returned almost $15 billion to investors through dividends and buybacks. $201 billion of Apple's $250 billion capital return program has been completed. The company also uses the capital for general corporate purposes, such as the repayment of earlier debt and acquisitions.
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