Apple Sells $14 Billion in Bonds to Take Advantage of Low Interest Rates

After years of hoarding cash, Apple has sold $14 billion in bonds to take advantage of cheap borrowing costs in order to return more cash to shareholders, according to a report by Bloomberg.

apple logo cash feature

The company issued debt in six parts. The longest portion of the offering, a 40-year security, will yield 95 basis points above Treasuries, after initially discussing between 115 and 120 basis points, according to a person with knowledge of the matter, who asked not to be identified as the details are private.

The report notes that until last year, Apple hadn't borrowed in the U.S. investment-grade market more than once in a calendar year since 2017, but low interest rates were too tempting for the company in its pursuit of aggressive share buybacks and dividends. Apple may also use it in funding for working capital, capital expenditures, acquisition and repayment of debt, according to Bloomberg's source.

Apple is believed to be sitting on $196 billion of cash, but has been working to reduce its net cash position, largely through payouts to stockholders. The company recently reported on earnings on the last quarter in which revenue topped $100 billion for the first time.

Tag: Bonds

Top Rated Comments

azentropy Avatar
24 months ago
I'm probably in the minority, but at this stage in my life and ownership (since 1996) I'd really like to see APPL substantially increase the dividend payout. It is down to 0.60% or so now.
Score: 14 Votes (Like | Disagree)
citysnaps Avatar
24 months ago

Why not just buy a auto maker with that cash?
They don't need to own one. That would be a horrendously poor use of capital. It's also why smart tech companies, like Apple, don't own silicon foundries, even though they have the $$$ to do so.
Score: 13 Votes (Like | Disagree)
neuropsychguy Avatar
24 months ago

They could always knock their prices down a little, and not have so much cash in the first place.
They are. Apple's hardware margins this past quarter were only about 31%, which is lower than they've been for years (e.g., 35% - 36% in 2017). That's effectively a 10+% decline in product costs to consumers over the past 3 - 4 years. Apple makes up the margins with services, however.

Could Apple lower prices more? Yes, but they've been very consistent in their approach to profit margins. This gives the company consistency for investors and it gives Apple finances to do things (reward stock owners, develop new products and services, have a rainy day fund, etc.).
Score: 12 Votes (Like | Disagree)
bklement Avatar
24 months ago

If they issue dividends or buy back shares do this out of spare cash then fine (although they should really wait for a decrease in share price to buy-back) but takinging on debt just to pay it to shareholders rather than invest in the company / R&D / make some acquisitions is nuts - even at low interest rates.
It's still cheaper than bringing the cash to the us and pay corporate tax. They can deuct the interest as expense.
Score: 5 Votes (Like | Disagree)
Maconplasma Avatar
24 months ago

They could always knock their prices down a little, and not have so much cash in the first place.
LMAO would you? Be real about it. If you were running a major corporation selling products that sell regardless of the higher price the last thing you're going to do is lower the price of goods. Having a boat load of cash is not a reason to do so.
Score: 5 Votes (Like | Disagree)
apparatchik Avatar
24 months ago

Couldn't they have used this to generate 2,800 hours of content for Apple TV+ this year. Figuring a production budget around $5 million per hour of content. Obviously some shows or movies would cost more or less per hour. That'd really get the ball rolling.
I think they missed the correct industry where to heavily invest in content creation, it should have been gaming, not video streaming.

They could fund AAA exclusives playable on the whole ecosystem, from iPhone to Mac to Apple TV. With all that money they could buy 2-3 studios and sign tens of exclusives from independent agencies to jump start the Mac as the go-to desktop platform for gaming and to place the iPhone & iPad as the handheld leader above the Nintendo Switch.

After all, current iPhone/iPads are well above the GPU power of the Switch and improve year after year.
Score: 4 Votes (Like | Disagree)

Related Stories

appleproductlineup

Apple Now Has More Than 1.8 Billion Active Devices Worldwide

Thursday January 27, 2022 2:12 pm PST by
Apple now has over 1.8 billion active devices worldwide, a new record, Apple CEO Tim Cook said during today's earnings call covering the first fiscal quarter of 2022. Apple's active install base includes iPhone, iPod touch, iPad, Mac, Apple TV, and Apple Watch, and it has grown from 1.5 active billion devices in January 2020 and 1.65 active billion devices in January 2021. Cook did not...
xiaomi lei jun

Xiaomi Pledges 'War of Life and Death' Against Apple to Become World's Biggest Smartphone Brand

Friday February 11, 2022 4:35 am PST by
Xiaomi intends to step up its challenge to Apple, the company's founder announced this week (via South China Morning Post). Xiaomi founder and chief executive Lei Jun said on Chinese social media platform Weibo that the company will specifically focus on the high-end segment of the global smartphone market in an effort to directly rival Apple, attempting to fill the void left by Huawei....
tim cook mark zuckerberg

Apple's Privacy Measures to Cost Facebook $10 Billion in 2022

Thursday February 3, 2022 12:30 am PST by
Facebook has said measures being taken by Apple on iOS that make it harder for platforms and apps to track users across other apps and websites will cost its business $10 billion in 2022. Facebook yesterday reported $33.67 billion in revenue, and while higher than expected, earnings per share were shy of analyst expectations. Facebook, renamed to Meta, also offered lower guidance for the...
us subscription revenue 2021

Sensor Tower: iOS Users Spent $13.5 Billion on Top 100 Subscription Apps in 2021, Up 31% Year-on-Year

Friday February 25, 2022 3:21 am PST by
Consumer spending on the top 100 non-game subscription-based apps across mobile platforms grew 41% year-on-year to $18.3 billion in 2021, up from 13 billion in 2020, according to a new report from analytics firm Sensor Tower. According to the data, revenue from subscription apps purchased on the App Store and the Google Play Store represented around 14% of the $131.6 billion that consumers...
apple card 1 iPhone 13

Apple Card 6% Daily Cash Listings for Apple Purchases Were in Error, but Apple is Honoring Them

Friday October 22, 2021 1:55 pm PDT by
Yesterday, a number of Apple Card users were seeing mentions of 6% Daily Cash showing up next to some recent Apple purchases, leading to some confusion about whether Apple was launching a special promotion to double the usual 3% cashback program. Not all purchases were showing up with the 6% bonus, as some users were seeing only the standard 3% and Apple Card support representatives were...
apple logo cash feature

Apple Briefly Becomes World's First $3 Trillion Company

Monday January 3, 2022 10:44 am PST by
Apple briefly became the world's first $3 trillion company today based on market capitalization, which is the total value of all of the company's outstanding shares. The milestone came after Apple's stock price rose over 40% in the last year. The impressive feat, which Apple achieved when its stock price reached the $182.86 mark during intraday trading, came just over 16 months after Apple be...
14 16 inch 2021 mbps back to back feature

Hackers Behind MacBook Pro Schematics Leak Arrested in Russia

Friday January 14, 2022 7:23 am PST by
The ransomware hackers behind last year's MacBook Pro schematics leak have now been arrested in Russia, the FSB today announced in a press release (via Reuters). Following an initial arrest late last year, Russia's Federal Security Service (FSB) explained that it has arrested 14 members of "REvil," an organized criminal association that used malicious software to extort funds from companies. ...
iphone 13 and iphone 13 pro max

iPhone 13 Lineup Led Global Smartphone Revenues to Record High in 2021

Friday February 25, 2022 6:41 am PST by
Apple's iPhone 13 lineup led global smartphone revenues to a new high of $448 billion in 2021, Counterpoint reports. Smartphone revenues grew seven percent year-on-year and 12 percent quarter-on-quarter in the fourth quarter of 2021, despite difficulties caused by component shortages. Apple's iPhone revenue is believed to have increased 35 percent year-on-year to $196 billion in 2021, its...

Popular Stories

Emergency SOS via Satellite iPhone YT

Apple's iPhone 14 Emergency SOS via Satellite Feature Saves Stranded Man in Alaska

Thursday December 1, 2022 4:37 pm PST by
With the launch of iOS 16.1, Apple rolled out a Emergency SOS via Satellite, which is designed to allow iPhone 14 owners to contact emergency services using satellite connectivity when no cellular or WiFi connection is available. The feature was put to the test in Alaska today, when a man became stranded in a rural area. In the early hours of the morning on December 1, Alaska State Troopers ...
iPhone Measure Height

Newer iPhones Allow You to Measure Someone's Height Instantly — Here's How

Saturday December 3, 2022 10:23 am PST by
iPhone 12 Pro and Pro Max, iPhone 13 Pro and Pro Max, and iPhone 14 Pro and Pro Max models feature a LiDAR Scanner next to the rear camera that can be used to measure a person's height instantly in Apple's preinstalled Measure app. To measure a person's height, simply open the Measure app, point your iPhone at the person you want to measure, and make sure they are visible on the screen from...
General iOS 16 Feature Yellow

iOS 16.2 for iPhone Launching This Month With These 8 New Features

Thursday December 1, 2022 8:44 am PST by
Apple plans to publicly release iOS 16.2 for the iPhone in mid-December, according to Bloomberg's Mark Gurman. The update remains in beta testing for now, with at least eight new features and changes already uncovered so far. iOS 16.2 introduces a number of new features, including Apple's new whiteboard app Freeform, two new Lock Screen widgets for Sleep and Medications, the ability to hide...
iOS 16

When Will iOS 16.2 Be Released?

Friday December 2, 2022 2:13 pm PST by
Apple in late October began testing iOS 16.2 and iPadOS 16.2 updates, providing betas to both developers and public beta testers. As of now, we've had four total betas, with the fourth beta having been released earlier this week. iOS 16.2 and iPadOS 16.2 are expected before the end of the year, and we thought we'd try to narrow down the launch timeline. With only four betas released since...
14 vs 16 inch mbp m2 pro and max feature 1

Major RAM Upgrade Coming to Next-Generation MacBook Pro

Friday December 2, 2022 2:03 am PST by
The next-generation MacBook Pro models could feature faster RAM, according to a recent report from a reliable source. MacRumors Forums member "Amethyst," who accurately revealed details about the Mac Studio and Studio Display before those products were announced, recently provided information about Apple's upcoming 14- and 16-inch MacBook Pro models. The new machines are expected to feature...
iPad 10 Battery Pull Tabs

iPad 10 Teardown Reveals Why Device Isn't Compatible With Apple Pencil 2

Thursday December 1, 2022 10:48 am PST by
Do-it-yourself repair website iFixit today shared a video teardown of Apple's new 10th-generation iPad, providing a closer look inside the tablet and revealing why the device lacks support for the second-generation Apple Pencil. The teardown reveals the internal layout of the iPad, including its two-cell 7,606 mAh battery, logic board with the A14 Bionic chip, and more. As suspected, the...
android apple fix rcs

Google Again Criticizes Apple for Not Adopting RCS for Messages App: 'Their Texting is Stuck in the 1990s'

Friday December 2, 2022 10:54 am PST by
Google is continuing on with its attempt to convince Apple to adopt the RCS messaging standard, publishing a new "it's time for RCS" blog post. Promoted heavily by Google, RCS or Rich Communication Services is a messaging standard that is designed to replace the current SMS messaging standard. It provides support for higher resolution photos and videos, audio messages, and bigger file sizes, ...
ios 16 2 beta notifiation center

PSA: Older Notifications No Longer Hidden in Notification Center in iOS 16.2 Beta 4

Friday December 2, 2022 5:23 am PST by
In a small but significant change to the way the Notification Center works in the latest iOS 16.2 beta, older notifications are now shown by default without having to swipe up. In the current release as well as earlier versions of iOS 16, users do not automatically see older notifications in the Notification Center like they did in iOS 15, and instead must manually swipe up from the middle...
lastpass

LastPass Hacked for Second Time This Year

Friday December 2, 2022 4:04 am PST by
Password management app LastPass says it is investigating a security incident after an "unauthorized party" compromised its systems on Wednesday and gained access to some customer information. The information was stored in a third-party cloud service shared by LastPass and parent company GoTo, said LastPass CEO Karim Toubba in a blog post. Toubba said the hackers used information stolen from ...
Apple Card Savings

Apple Card Customer Agreement Updated for 'Upcoming' Savings Account Feature

Friday December 2, 2022 11:43 am PST by
Goldman Sachs this week updated its Apple Card customer agreement to reflect the credit card's upcoming Daily Cash savings account feature, which was expected to launch with iOS 16.1 but appears to have been delayed. "To enable new ways to use Daily Cash like the upcoming Savings account feature, we are updating the Daily Cash Program section of your Apple Card Customer Agreement," reads an...