• Apple Reportedly Eyeing Its First-Ever Bond Offering Worth 200 Billion Yen



    Apple is reportedly looking to issue 200 billion yen (roughly $1.62 billion USD) in Japanese bonds as soon as June. This marks its first ever debt sale in the country. The whole effort is in reality Apple looking to take advantage of Japanís extremely low interest rates according to local business publication, Nikkei, which noted that the company is in a position to set its rate 1% point lower than in the US. The move results in savings on costs even after a conversion back to dollars.

    The proceeds are expected to go towards funding Appleís cash return program for shareholders and possibly to grow Japanese operations.

    The Cupertino California reportedly began gauging interest in bonds earlier this month after supposedly talking to regional banks, life insurance firms and various other institutional investors. Though the company is looking to seek out Japanese investors first and foremost, it is said that overseas investors may be able to participate as well.

    For those of you who didnít know, Apple has engaged in various bond sales in both the US and Europe over the past few years in an effort to help finance its cash return program, which through dividends and buybacks should see $200 billion delivered to shareholders by the end of March 2017. Although the company could spend roughly some of its $178 billion in cash reserves, Apple seems to have preferred to leave most of that stockpile intact.

    Weíll have to see what move Apple ends up making by being patient.

    Source: Nikkei
    This article was originally published in forum thread: Apple Reportedly Eyeing Its First-Ever Bond Offering Worth 200 Billion Yen started by Akshay Masand View original post
    Comments 2 Comments
    1. fleurya's Avatar
      fleurya -
      Seems so strange to issue bonds and take on interest expense to return money to shareholders when they have nearly $200 billion in cash laying around. I suppose those reserves could be in other short term investments where they are making more interest than the bond issue, but I doubt it.

      What are they holding on to all that cash for and what will they do with it? At this point they could buy most companies outright without flinching.
    1. SpiderManAPV's Avatar
      SpiderManAPV -
      Quote Originally Posted by fleurya View Post
      Seems so strange to issue bonds and take on interest expense to return money to shareholders when they have nearly $200 billion in cash laying around. I suppose those reserves could be in other short term investments where they are making more interest than the bond issue, but I doubt it.

      What are they holding on to all that cash for and what will they do with it? At this point they could buy most companies outright without flinching.
      If I understand it right, they have their holdings in different companies around the world. In order to use those funds in any country except where they currently are they have to pay an import tax higher than interest rates right now. I could be wrong, but thatís how I understand it.
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