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  • Apple Announces its First Sterling-Denominated Bond, Currently Valued at $2 Billion


    In a recent filing with the US Securities and Exchange Commission, Apple announced its first-ever sterling-denominated bond issuance, which is set at 1.25 billion pounds (nearly $2 billion). The debt offering, which is detailed in a free writing prospectus supplementing Apple’s massive 2013 bond sale, consists of two notes, one that is set at 750 million pounds that matures on July 31, 2029 and another at 500 million pounds due on the same day in 2042. Interest payments on the 12- and 17-year notes are semi-annual on January 31 and July 31 of each yet, set to commence in 2016.

    The bonds are supported by Goldman, Sachs & Co. , Merrill Lynch International, HSBC Bank, Deutsche Bank’s London Brand and J.P. Morgan Securities and achieved Aa1 and AA+ ratings by both Moody’s and Standard & Poor’s respectively. The co-managing institutions for the bond consisted of Barclays Bank, Lloyds Bank and The Royal Bank of Scotland.

    For those of you who didn’t know, as its overseas cash pile grows to more than $190 billion, Apple has increasingly taken to debt markets in a bid to raise funds for a domestic capital returns program. The company is in a position where it could use its international reserves to repurchase stock but is hesitant to repatriate funds due to high US tax rates. Multiple tech firms based in the US face similar issues and are also seeing their overseas cash piles grow.

    Apple previously offered both bonds in the US and Euros but more recently has been showing a growing interest in low rate zones in both Asia and Europe. In Jun for example, Apple ended up raising $2 billion in yen-denominated bonds, which followed a small offering in Swiss franc-denominated offering in February.

    As of right now, Apple plans to return $200 billion to shareholders through both dividends and stock buybacks by the end of March 2017.

    Source: SEC Filings via AppleInsider
    This article was originally published in forum thread: Apple Announces its First Sterling-Denominated Bond, Currently Valued at $2 Billion started by Akshay Masand View original post