Apple to Sell $5 Billion of Debt to Fund Buybacks, Dividends
Apple Returns to Debt Market to Fund Buybacks and DividendsBy
September 5, 2017, 8:40 AM EDT
September 5, 2017, 1:04 PM EDT
Apple Inc. is selling bonds again to finance its current round of share buybacks and dividends.
The iPhone maker is offering the debt in as many as five parts, according to a filing. The longest portion of the sale, a 30-year security, may yield 1.125 percentage points above Treasuries, down from initial talk of around 1.25 percentage points, according to a person with knowledge of the matter, who asked not to be identified because the deal is private.
Apple is about three-fourths of the way through a program that’s returning $300 billion of capital to shareholders by March 2019. At the start of July, the company was sitting on more than $261.5 billion of cash — 94 percent of which was outside the U.S., Chief Financial Officer Luca Maestri said on an earnings call. The Cupertino, California-based company declared a regular quarterly dividend of 63 cents a share last month.
The bond sale comes a week before Apple is scheduled to announce successors to the iPhone 7 and iPhone 7 Plus during a launch event at its new campus. The latest model is said to eliminate the concept of a home button, a feature almost synonymous with the gadget itself, along with other upgrades to the flagship device, Bloomberg reported last month. It’s Apple’s biggest product, responsible for about two-thirds of sales.
Apple, selling debt for at least the seventh time this year, is joined by a host of other issuers following the lull that led up to the U.S. Labor Day holiday. Home Depot Inc. is selling $1 billion of investment-grade debt today, and International Business Machines Corp. is in the market with a five-part deal. Apple sold C$2.5 billion ($2 billion) in its first Canadian maple bond deal last month.
Goldman Sachs Group Inc., Bank of America Corp. and Deutsche Bank AG are managing the latest bond sale, the filing showed.
— With assistance by Brian W Smith, and Alex Webb
via Bloomberg News https://bloom.bg/2lsrIoJ
September 5, 2017 at 12:50PM