updated 09:43 am EDT, Mon April 28, 2014
Second such sale in a year
To finance its expansion of share buybacks from $60 billion to $90 billion, Apple is preparing a domestic and international bond sale in the realm of $17 billion, notes the Financial Times. During Apple's Q2 results call, Apple's incoming CFO -- Luca Maestri -- made the comment that Apple would probably raise "an amount of term debt financing similar to what we issued in 2013." A year ago, Apple sold $17 billion in bonds to provide funding for its initial buybacks.
The Times remarks that the 2013 sale was the "world's largest corporate debt sale" at that point, with demand surpassing $50 billion. It was beaten only by Verizon's sale of $49 billion in bonds, which it put towards the $130 billion cost of buying the 45 percent stake of itself that it didn't own. Apple's next sale will probably keep it squarely in second.
The company could conceivably finance the expanded buyback outright by repatriating some of its foreign cash reserves, which exceed $130 billion. Maestri however has reiterated Apple's position that it's unwilling to pay the standard tax rate it would owe, 35 percent. In the past the company has lobbied the US government for a "tax holiday" that would allow it to bring money back at a lower tax rate. Going into debt will also give Apple more flexibility in buying smaller business it wants to assimilate.