Go Back   MacRumors Forums > News and Article Discussion > MacRumors.com News Discussion

Reply
 
Thread Tools Search this Thread Display Modes
Old Nov 4, 2014, 07:17 AM   #1
MacRumors
macrumors bot
 
Join Date: Apr 2001
Apple Looking to Raise $3.5 Billion From Bond Sale Involving Euros [Updated]




Following yesterday's report that Apple was preparing to hold a new bond sale that includes a component denominated in euros, the company today filed a prospectus with the Securities and Exchange Commission outlining its general plans, which include two chunks of debt with staggered maturities. The Wall Street Journal has more details on the prospectus and how its yields will be the lowest ever for 8-year and 12-year debt:
Quote:
The iPhone maker is seeking to raise at least EUR1 billion ($1.2 billion) from two chunks of euro debt maturing in eight and 12 years.

Those would beat the lowest yields ever paid for euro-denominated, corporate bonds of these maturities, according to Dealogic data, reflecting solid confidence that the bonds represent a safe bet. Bankers managing the bond sale suggested the eight-year notes will give investors a yield of roughly 1.1% and the 12-year notes around 1.7%.

Apple spoke with investors on Monday about issuing bonds and will use the proceeds of the sale for general corporate purposes, including share buybacks and dividend payments.
This would mark first time that Apple would begin issuing bonds in euros, with Deutsche Bank and Goldman Sachs arranging the sale. This past April, Apple held a $12 billion bond sale, which followed a record $17 billion sale last year. Apple's bond offerings are a part of its expanded capital return program, which primarily involves a major stock buyback program and a quarterly dividend that aims to return more than $130 billion to shareholders by the end of 2015.

Update: The Wall Street Journal has revised its article to note Apple is actually looking to raise EUR2.8 billion ($3.5 billion) in the bond sale.

Article Link: Apple Looking to Raise $3.5 Billion From Bond Sale Involving Euros [Updated]
MacRumors is offline   0 Reply With Quote
Old Nov 4, 2014, 07:19 AM   #2
captain cadet
macrumors regular
 
Join Date: Sep 2012
Euro? Bit risky with a currency that almost bankrupted itself?
__________________
Technology is the core of our World, Every person on this planet should take a interest as we are changing the human race with technology!
captain cadet is offline   3 Reply With Quote
Old Nov 4, 2014, 07:20 AM   #3
TallManNY
macrumors 68020
 
TallManNY's Avatar
 
Join Date: Nov 2007
Chump change. What's the point of Apple doing such a small issuance?
__________________
Mid-2011 3.1GHz i5 iMac (6970m); HP Spectre (Win 8.1)
BBRY Q10; iPhone 6; iPad Mini-R
Apple Stockholder (a nice dividend, stock buybacks and cutting edge innovation? yes please!)
TallManNY is offline   3 Reply With Quote
Old Nov 4, 2014, 07:24 AM   #4
Freida
macrumors 6502a
 
Join Date: Oct 2010
what is the benefit of buying these bonds for such a long time when in 12 years the inflation will depreciate it? ie. if i buy 1000EUR today and will get 1000EUR in 12 years then the value i can buy wit it will probably be something like 800EUR.
Or is the interest on those so high that I will actually profit from it?
Can someone with more knowledge give me little bit of a clarification so I can learn, please?
Thank you
Freida is offline   1 Reply With Quote
Old Nov 4, 2014, 07:30 AM   #5
whooleytoo
macrumors 603
 
whooleytoo's Avatar
 
Join Date: Aug 2002
Location: Cork, Ireland.
Send a message via AIM to whooleytoo
I wonder if anyone in Apple even remembers what "cash flow problems" means. I go to the ATM, and it just laughs at me. Apple heads over to Europe to pick up 1.2billion on a whim. I wonder what happened? They impulse-bought a small South American country but forgot to bring their wallet?
__________________
Mac <- Macintosh <- McIntosh apples <- John McIntosh <- McIntosh surname <- "Mac an toshach" <- "Son of the Chief"
whooleytoo is offline   2 Reply With Quote
Old Nov 4, 2014, 07:31 AM   #6
foobarbaz
macrumors 6502
 
Join Date: Nov 2007
Quote:
Originally Posted by captain cadet View Post
Euro? Bit risky with a currency that almost bankrupted itself?
Obviously you were just trying to be clever and don't know much about finance.

If you assume the Euro might be worthless soon, then taking debt in Euro is not a risk. As the Euro falls, your debt (measured in USD) decreases.

The risk, however, is that the Euro is somewhat low at the moment. If it gains (the USD falls), the debt will increase.

Generally speaking, EUR/USD is somewhat stable, though. It has been circling 1.30 EUR/USD for a decade.
foobarbaz is offline   18 Reply With Quote
Old Nov 4, 2014, 07:40 AM   #7
centauratlas
macrumors 6502a
 
Join Date: Jan 2003
Location: Florida
Quote:
Originally Posted by Freida View Post
what is the benefit of buying these bonds for such a long time when in 12 years the inflation will depreciate it? ie. if i buy 1000EUR today and will get 1000EUR in 12 years then the value i can buy wit it will probably be something like 800EUR.
Or is the interest on those so high that I will actually profit from it?
Can someone with more knowledge give me little bit of a clarification so I can learn, please?
Thank you

The interest rate was 1.1 or 1.7% depending on the term according to the article and summary. So, the rate is quite low, and probably won't even cover the inflation rate.

You are correct though, it makes little sense to buy the bonds for the average person, but lots of sense for Apple to issue these. They get 1000 Euro today and get to repay 800 Euro in the future.
centauratlas is offline   2 Reply With Quote
Old Nov 4, 2014, 07:50 AM   #8
WBRacing
macrumors regular
 
Join Date: Nov 2012
The Carl Ichan effect.

Whenever I hear of anything relating to financial strategy I immediately imagine that locust whispering in the boards ear.
WBRacing is offline   2 Reply With Quote
Old Nov 4, 2014, 07:51 AM   #9
Freida
macrumors 6502a
 
Join Date: Oct 2010
Quote:
Originally Posted by centauratlas View Post
The interest rate was 1.1 or 1.7% depending on the term according to the article and summary. So, the rate is quite low, and probably won't even cover the inflation rate.

You are correct though, it makes little sense to buy the bonds for the average person, but lots of sense for Apple to issue these. They get 1000 Euro today and get to repay 800 Euro in the future.
So the question is: Why would anyone buy it from them if inflation will make you lose money?
Freida is offline   1 Reply With Quote
Old Nov 4, 2014, 08:02 AM   #10
syklee26
macrumors 6502
 
Join Date: Jul 2005
Can I buy the bonds with Apple Pay?
syklee26 is offline   6 Reply With Quote
Old Nov 4, 2014, 08:09 AM   #11
Ritstu
macrumors newbie
 
Join Date: Nov 2014
Quote:
Originally Posted by Freida View Post
So the question is: Why would anyone buy it from them if inflation will make you lose money?
So I'm guessing that you don't have any money that is saved in a Money Market account, a savings account, or a checking account that pays interest? What about CDs? All of these will not make money over inflation (in a typical inflation year - obviously not when it's 0%), yet people keep their money in them due to the fact that they are safe and liquid.

Buying these bonds, while they may not be as liquid, is a safe investment that could be sold before maturity if needed. You get a better rate with these bonds than the majority of accounts that are available that I listed above.

Personally, I agree with your statement that I wouldn't buy them just because I prefer riskier investments but there is definitely a place in the market for these and they will be bought up quickly when they go to market.
Ritstu is offline   3 Reply With Quote
Old Nov 4, 2014, 09:00 AM   #12
PinkyMacGodess
macrumors 68020
 
PinkyMacGodess's Avatar
 
Join Date: Mar 2007
Location: Midwest America.
Quote:
Originally Posted by captain cadet View Post
Euro? Bit risky with a currency that almost bankrupted itself?
With Goldman-Sachs help...

----------

So, in the same vein as the Mac Mini arguments over it being the end of Apple as we know it, anyone prophesying that this is the end of America and the US Dollar as THE currency of the world?
PinkyMacGodess is offline   1 Reply With Quote
Old Nov 4, 2014, 09:02 AM   #13
Glenny2lappies
macrumors 6502
 
Join Date: Sep 2006
Location: Brighton, UK
Tax?

It's odd that they're selling the bonds for very little and using this for dividends & buybacks, so are deferring the payments. Smells a little wiffy.

I'd wager that it's a tax dodge. So Apple won't pay for any schools & hospitals.
Glenny2lappies is offline   1 Reply With Quote
Old Nov 4, 2014, 09:06 AM   #14
teslo
macrumors regular
 
Join Date: Jun 2014
"intelligent assessment of the situation... ummmm... apple... lawyers. bonds. dividends..."

how'd i do?
teslo is offline   0 Reply With Quote
Old Nov 4, 2014, 09:16 AM   #15
throttlemeister
macrumors 6502
 
Join Date: Mar 2009
Location: Netherlands
Quote:
Originally Posted by captain cadet View Post
Euro? Bit risky with a currency that almost bankrupted itself?
*snicker*

You mean that currency that was designed to be 1:1 to the US$, but dropped to $0.8 after its introduction and then climbed to be over $1.50. And then in the American induced crisis went down to fluctuate mostly between $1.30 and $1.40? That currency?

You shouldn't believe all that you see on Fox mate. In fact, you probably shouldn't believe anything you see on Fox, but that's a different discussion.
__________________
Macbook Pro 2.93 | 8GB | 120GB OWC Extreme Pro + 320GB/7200rpm | 24" LED Cinema Screen
Macbook Pro Retina 2.7 | 16GB | 512MB Flash | 1TB Crucial SSD external over Thunderbolt
throttlemeister is offline   5 Reply With Quote
Old Nov 4, 2014, 09:18 AM   #16
bruns
macrumors newbie
 
Join Date: Nov 2014
The allmighty nothing

This is simply a smart business decision by Apple. They will invariably be the first trillion dollar public company soon enough.

For those that comment on Apple & co needing to pay their taxes, and the addicted that ignorantly say that technology is the all important stuff of life, yes, Apple is worth an obscene amount, making mega profits, so more than the adequate amount of tax should be unquestionably payed back by all these absconders.
There's way too much protection for the dictators of the country (big business), whilst the rest suffer. To exalt these companies for making trinkets is an exercise in ignorance.
As for technology being the be all, that's only in the case of development of necessary tools, such as in medical technology, communication, mapping, exploration. The rest is just fodder for the mindlessly addicted.
bruns is offline   0 Reply With Quote
Old Nov 4, 2014, 09:18 AM   #17
Glassed Silver
macrumors 6502a
 
Glassed Silver's Avatar
 
Join Date: Mar 2007
Location: Kassel, Germany
Quote:
Originally Posted by TallManNY View Post
Chump change. What's the point of Apple doing such a small issuance?
Don't worry, Carl Icahn's call will fix this.

Glassed Silver:mac
__________________
Last login: Sat May 5 22:52:51 on ttys000
Society-System:~ dumbnut$ rm -rf ~/Library/mind.db ~/Library/Frameworks/tolerance ~/Library/Frameworks/commonsense ~/integrity ~/individuality
Glassed Silver is offline   0 Reply With Quote
Old Nov 4, 2014, 09:20 AM   #18
nikaru
macrumors 6502
 
Join Date: Apr 2009
Quote:
Originally Posted by whooleytoo View Post
I wonder if anyone in Apple even remembers what "cash flow problems" means. I go to the ATM, and it just laughs at me. Apple heads over to Europe to pick up 1.2billion on a whim. I wonder what happened? They impulse-bought a small South American country but forgot to bring their wallet?

When you cant use your cash you have cash-flow problems, yes. I dont see the point however in the buy-back program and paying ridicously small dividends to shareholders, but maybe Im not that smart.
nikaru is offline   0 Reply With Quote
Old Nov 4, 2014, 09:23 AM   #19
IJ Reilly
macrumors P6
 
IJ Reilly's Avatar
 
Join Date: Jul 2002
Location: Palookaville
Quote:
Originally Posted by Ritstu View Post
So I'm guessing that you don't have any money that is saved in a Money Market account, a savings account, or a checking account that pays interest? What about CDs? All of these will not make money over inflation (in a typical inflation year - obviously not when it's 0%), yet people keep their money in them due to the fact that they are safe and liquid.

Buying these bonds, while they may not be as liquid, is a safe investment that could be sold before maturity if needed. You get a better rate with these bonds than the majority of accounts that are available that I listed above.

Personally, I agree with your statement that I wouldn't buy them just because I prefer riskier investments but there is definitely a place in the market for these and they will be bought up quickly when they go to market.
In short, bonds are a part of any diversified portfilio.
__________________
*The season starts too early and finishes too late and there are too many games in between.
Bill Veeck
IJ Reilly is offline   1 Reply With Quote
Old Nov 4, 2014, 09:36 AM   #20
Freida
macrumors 6502a
 
Join Date: Oct 2010
Quote:
Originally Posted by Ritstu View Post
So I'm guessing that you don't have any money that is saved in a Money Market account, a savings account, or a checking account that pays interest? What about CDs? All of these will not make money over inflation (in a typical inflation year - obviously not when it's 0%), yet people keep their money in them due to the fact that they are safe and liquid.

Buying these bonds, while they may not be as liquid, is a safe investment that could be sold before maturity if needed. You get a better rate with these bonds than the majority of accounts that are available that I listed above.

Personally, I agree with your statement that I wouldn't buy them just because I prefer riskier investments but there is definitely a place in the market for these and they will be bought up quickly when they go to market.
You are right, I don't. I'm probably like you as I prefer to invest in stock or if I want to be safe then I will invest in Premium Bonds here in UK as they do a lottery thing which for me turned out to give me more than a bank but its all about luck. But I got few times 50 or 25 which made it worth while
I now see the point you pointed out. Guess it does make sense although I think that there are better ways to make interest on your money.
Freida is offline   0 Reply With Quote
Old Nov 4, 2014, 09:45 AM   #21
Babbles
macrumors newbie
 
Join Date: Apr 2014
Location: U.S.A
Quote:
Originally Posted by foobarbaz View Post
Obviously you were just trying to be clever and don't know much about finance.

If you assume the Euro might be worthless soon, then taking debt in Euro is not a risk. As the Euro falls, your debt (measured in USD) decreases.

The risk, however, is that the Euro is somewhat low at the moment. If it gains (the USD falls), the debt will increase.

Generally speaking, EUR/USD is somewhat stable, though. It has been circling 1.30 EUR/USD for a decade.
This is a great yet simple explanation. This is knowledge people should absorb for future understanding.
Babbles is offline   1 Reply With Quote
Old Nov 4, 2014, 09:51 AM   #22
rmsanger
macrumors newbie
 
Join Date: Jul 2014
Right because not having enough cash on hand was their problem.

I guess it will depend on how they reinvest the new capital; maybe a swiss watch company?
rmsanger is offline   0 Reply With Quote
Old Nov 4, 2014, 10:18 AM   #23
jetlife2
macrumors regular
 
Join Date: Apr 2004
Location: Cincinnati, Oh
Great deal for shareholders

It is amazing they command such a low interest rate for corporate bonds. This is a great deal for the company and shareholders. Using the proceeds for share buybacks and dividend payments is very smart. On the other side of the deal, as a corporate bond investor they will be on the lowest risk, lowest return side of the spectrum and will make a great anchor for a bond portfolio.
__________________
imac i7 ssd, ipad air, iphone, ATV, G3 tower
jetlife2 is offline   0 Reply With Quote
Old Nov 4, 2014, 10:25 AM   #24
Sandstorm
macrumors 6502
 
Join Date: Sep 2011
Location: Riga, Latvia
Quote:
Originally Posted by captain cadet View Post
Euro? Bit risky with a currency that almost bankrupted itself?
Euro as a currency had a turbulent time (very much thanks to the US crisis), but massive stabilising and safeguarding measures have been taken and it's here to stay. Simply too much is at stake.

My country joined the Euro January 1st of this year and I have zero complaints. BTW, in two months yet another EU country is joining the Eurozone - our southern neighbour Lithuania. Likely to be followed by Poland in not so distant future.
Sandstorm is offline   1 Reply With Quote
Old Nov 4, 2014, 10:42 AM   #25
groovyd
macrumors 6502
 
Join Date: Jun 2013
Apple would make a great country to live in atleast the most fiscally stable country in the world.
groovyd is offline   0 Reply With Quote

Reply
MacRumors Forums > News and Article Discussion > MacRumors.com News Discussion

Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Forum Jump

All times are GMT -5. The time now is 07:17 AM.

Mac Rumors | Mac | iPhone | iPhone Game Reviews | iPhone Apps

Mobile Version | Fixed | Fluid | Fluid HD
Copyright 2002-2013, MacRumors.com, LLC