- Apr 12, 2001
Apple today filed a prospectus with the Securities and Exchange Commission, hoping to sell $5 billion worth of new debt according to reports.
Managed by Goldman Sachs and Deutsche Bank, the offer's monetary specifics haven't yet been revealed by Apple, but the company says the money will be used to cover "general corporate purposes, including repurchases of our common stock and payment of dividends under our program to return capital to shareholders, funding for working capital, capital expenditures and acquisitions and repayment of debt."
As Bloomberg's Lisa Abramowicz points out, much of the proceeds the company receives from the bond sale are undoubtedly going to buybacks and dividend payments.
This follows the company's previous bond sale last November, where Apple notably began issuing bonds in euros. That sale saw Apple looking to raise EUR2.8 billion ($3.5 billion) for the usual "general corporate purposes," again primarily share buybacks and dividend payments.
Today's prospectus comes on the heels of the company's record-breaking earnings for the first fiscal quarter of 2015, posting revenue of $74.6 billion in the quarter, and subsequently seeing a noticeable bump in shares of its stock when the market opened last Friday.
While the company holds roughly $178 billion in cash and marketable securities, much of that cash is held outside of the United States and would currently be subject to significant taxes if brought back to the U.S. to be used for stock buybacks and dividends. As a result, Apple has been pursuing bond sales at very favorable interest rates as a cheaper means of funding these initiatives, repaying the bonds from ongoing operations over time.
Update Feb 3 4:52 PT: The Wall Street Journal reports that Apple has increased the size of its bond deal to $6.5 billion.
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Article Link: Apple Planning to Raise Reported $5 Billion in Bond Sale [Updated]