Market Overview

Apple Capitalizes On Plunge In Yields, Issues Cheapest Bonds In Years

Apple Capitalizes On Plunge In Yields, Issues Cheapest Bonds In Years

Apple Inc. (NASDAQ: AAPL) has issued $8 billion in bonds to fund share buybacks and dividends.

What Happened

Apple is issuing $2 billion for three years, $2.25 billion forfive years, $1.75 billion for 10 years and $2.5 billion for 30 years in bonds. 

CNBC anchor Wilfred Frost said the coupons are closer to Treasury notes relative to “any other company.”

For the three-year, Apple is paying 0.75%; 1.125% for the five-year; and 1.65% and 2.65% for 10- and 30-year bonds, respectively.

On Tuesday, the 10-year Treasury yield stood at 0.63%, which is near an all-time low.

Why It Matters

The notes will mature in 2023, 2025, 2030 and 2050, according to a preliminary prospectus that Cupertino filed with the Securities and Exchange Commission on Monday. 

Apple has listed Goldman Sachs Group Inc. (NYSE: GS), Bank of America Securities, the investment division of Bank of America (NYSE: BAC), JPMorgan Chase&Co. (NYSE: JPM), and Morgan Stanley (NYSE: MS) as underwriters.

Apple has huge cash reserves and last tapped the debt markets in September 2019. The company closed the second quarter with $192.8 billion cash on hand.

AAPL Price Action

Apple shares were trading 0.92% higher at $295.85 in Tuesday's premarket session. 

Photo by Daniel L. Lu via Wikimedia


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