updated 09:32 am EDT, Wed April 30, 2014
Company likely planning second sale
Apple put forward a seven-part bond offering on Tuesday worth $12 billion, Reuters reports. Proceeds will help finance Apple's stock buyback program, which is being expanded from $60 billion to $90 billion. The $12 billion value is below the $17 billion that was expected, since Apple's own Luca Maestri said the company would raise "an amount of term debt financing similar to what we used in 2013."
It's thought however that Apple may be planning to turn to foreign debt markets for the remainder. That would allow diversification, including preventing the US debt market from becoming too saturated. Rumors mentioned by Reuters point to a eurozone sale of another $7 billion in bonds, where Apple will be able to take advantage of low interest rates.
The $12 billion on offer has already generated over $40 billion in orders, probably in no small part because of their double-A-plus rating. The bonds are divided into fixed-rate offerings that mature in three, five, seven, 10 and 30 years, along with three- and five-year floaters.