Although the $6.5 billion bond issue which was recently revealed may be enough to cover its existing capital return program, Wells Fargo believes that Apple could potentially be forced to either raise an additional round of debt or repatriate cash from overseas if the program is to continue its traditional annual increase. The Wells Fargo analyst, Maynard Um, believes that Apple’s $20 billion in onshore cash along with the $6.5 billion bond offering would easily pay for the current share repurchase program along with a projected 9% increase in the company’s dividend.

Um noted that Apple raised $17 billion in 2013 and increased the buyback program by $50 billion with $42 billion in domestic cash on the balance sheet. In 2014, Apple brought a $12 billion raise with $18 billion in domestic cash and a $30 billion increase to the repurchase initiative. It remains unclear whether Apple will enlarge its current $130 billion capital return program this year. The company ended up spending $5 billion to repurchase 46 million shares in the first fiscal quarter of 2015 and retired an additional 8 million shares.

Apple CEO Tim Cook in his most recent earnings call continued to “solicit feedback from a broad base of investors” and promised a program update would be announced during the next call which is set to take place in April. On the other hand, activist investor, Carl Icahn who has amassed a significant position in Apple, also continues to advocate for increased buybacks. Icahn recently suggested that he would increase his current $203 price target for Apple shares.

We’ll have to see if Um’s speculation turns out to be correct by being patient.

Source: Wells Fargo via AppleInsider