Apple Raises $7 Billion in Debt Ahead of Trump's Proposed Tax Holiday

Apple BondsApple has raised $7 billion in debt in a six-part bond sale, according to the company's final pricing term sheet filed with the Securities and Exchange Commission today. The fixed and floating notes mature between 2020 and 2027.

Apple said it entered 2017 with $256.8 billion in cash and marketable securities, but approximately 93 percent of that amount is held outside of the United States. Those foreign reserves would be subject to up to a 35 percent corporate tax rate if repatriated, so Apple turns to the debt markets to raise money at a cheaper cost.

Apple will use the $7 billion raised to continue funding dividend payments and share buybacks. Apple expanded its share repurchase authorization by an additional $50 billion this week, and the company says it expects to spend a total $300 billion in cash under its capital return program through March 2019.

Apple also typically puts the money towards operational expenses, repayment of earlier debt, and acquisitions of other companies. Then there's Apple's new $1 billion advanced manufacturing fund announced by CEO Tim Cook earlier this week, which will need to be funded eventually as well.

Apple may not have to raise as much through debt markets in the future, as U.S. President Donald Trump has expressed his desire for a tax holiday that would allow domestic companies to repatriate foreign cash at a discounted tax rate. Reports have suggested the rate could be as low as 10 percent.

Interestingly, unlike many of Apple's recent bond offerings, today's sale does not include any notes with 30-year maturities. Some analysts believe Apple may be avoiding long-term bonds given the possibility of a tax holiday.

Peter Tchir of Brean Capital in a note to clients obtained by Barron's:

This is the 7th time Apple has come to market with a big slate of bonds. They started in 2013 with no debt and should be at about $100 billion by the end of today. In each of those prior deals they issued 30 year bonds - but not this time. Is it uncertainty over taxes? Talk about an ultra-bond on treasury side? Repatriation? Maybe it means nothing, but I think it is at least mildly curious that they aren't doing a new long bond here.

Apple's financial chief Luca Maestri this week acknowledged "there is a lot that still needs to happen there," in regards to the Trump administration's tax plans. "The program we're announcing today reflects the current tax legislation in this country," he said. "Obviously we will reassess our situation if things change."

Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Top Rated Comments

dannys1 Avatar
75 months ago
Where do I sign up for this tax holiday when it's available ...
Sorry, it's for billionaires only.
Score: 23 Votes (Like | Disagree)
unobtainium Avatar
75 months ago
The tax holiday shouldn't give them a lower rate than regular Americans have to pay on overseas income.
Score: 14 Votes (Like | Disagree)
applesith Avatar
75 months ago
For all of Tim's Trump bashing, he really should have Apple pay the 35% rate and bring the money in.
Score: 13 Votes (Like | Disagree)
1applerules1 Avatar
75 months ago
Promises made, promises will be delivered. Tax cuts for everyone! MAGA!!
Score: 9 Votes (Like | Disagree)
shareef777 Avatar
75 months ago
Where do I sign up for this tax holiday when it's available ...
Score: 9 Votes (Like | Disagree)
WarHeadz Avatar
75 months ago
Trump probably doesn't remember he ever said that. He has the memory of a goldfish. I wouldn't count on him making good on it.
[doublepost=1493992748][/doublepost]
Apple may not have to raise as much through debt markets in the future, as U.S. President Donald Trump has expressed his desire for a tax holiday that would allow domestic companies to repatriate foreign cash at a discounted tax rate. Reports have suggested the rate could be as low as 10 percent.
Score: 7 Votes (Like | Disagree)

Popular Stories

Multi Display CarPlay 1

Apple Launching All-New CarPlay Experience Later This Year With These 5 Features

Sunday January 29, 2023 10:15 am PST by
In June 2022, Apple previewed the next generation of CarPlay, promising deeper integration with vehicle functions like A/C and FM radio, support for multiple displays across the dashboard, personalization options, and more. Apple says the first vehicles with support for the next-generation CarPlay experience will be announced in late 2023, with committed automakers including Acura, Audi,...
dewey airtag

Report Highlights Danger of Using AirTags for Tracking Dogs

Monday January 30, 2023 1:45 pm PST by
AirTags may be a convenient way for tracking dogs that might get off leash or otherwise lost, but there are dangers associated with the practice, as outlined by a report from The Wall Street Journal. At 1.26 inches in diameter, AirTags are able to fit easily on a dog's collar, but that size also makes the tracking devices small enough to swallow, at least for a medium to large-sized dog, and ...
maxresdefault

Kuo: Apple to Release Foldable iPad With Carbon Fiber Kickstand in 2024

Monday January 30, 2023 12:55 am PST by
Apple will launch a foldable iPad with a carbon fiber kickstand sometime next year, according to analyst Ming-Chi Kuo. Subscribe to the MacRumors YouTube channel for more videos. In a series of tweets, Kuo said he expects an "all-new design foldable iPad" to be the next big product launch in the iPad lineup, with no other major iPad releases in the next nine to 12 months. The analyst said he...
tim cook data privacy day

Apple Violated U.S. Labor Laws With Anti-Leak Email

Monday January 30, 2023 3:43 pm PST by
Apple violated United States labor laws when it sent out an email warning employees about leaking confidential information about the company, the National Labor Relations Board (NLRB) said today in a ruling shared by Bloomberg. Rules that Apple has established around leaks "tend to interfere with, restrain or coerce employees" from the exercise of their rights under the National Labor...
top stories 28jan2023

Top Stories: iOS 16.3 Released, iPhone 15 Pro Rumors, macOS Tips and Tricks, and More

Saturday January 28, 2023 6:00 am PST by
Following last week's hardware announcements, this week saw the actual release of several of the new products as well as operating system updates bringing new features and bug fixes across Apple's platforms. This week also saw some fresh rumors about the iPhone 15 lineup and Apple's upcoming AR/VR headset, while we shared some tips to help you get the most of your macOS experience, so read...
iphone 15 pro wifi 6e

Internal Apple Document From Leaker 'Unknownz21' Confirms Wi-Fi 6E Will Be Limited to iPhone 15 Pro Models

Friday January 27, 2023 10:01 am PST by
Multiple rumors have suggested that the next-generation iPhone 15 models will adopt the Wi-Fi 6E standard that Apple has already introduced in the iPad Pro and MacBook Pro, and now a leaked document appears to confirm Apple's plans. Sourced from researcher and Apple leaker Unknownz21 (@URedditor), the document features diagrams of the iPhone 15's antenna architecture. D8x refers to the...
iPhone 14 Pro Purple Side Perspective Feature Purple

iPhone 15 Pro Rumored to Have These 8 Features

Friday January 27, 2023 2:11 pm PST by
Apple's next-generation iPhone 15 Pro and iPhone 15 Pro Max are expected to be announced in September as usual. Already, rumors suggest the devices will have at least eight exclusive features not available on the standard iPhone 15 and iPhone 15 Plus. An overview of the eight features rumored to be exclusive to iPhone 15 Pro models:A17 chip: iPhone 15 Pro models will be equipped with an A17...