Apple (APPL) is planning an investor conference call today to discuss a new bond sale according to several news sources. According to those sources, Goldman Sachs (GS) and Deutsche Bank (DB) are organizing the calls and the bond sale will be denominated in Euro.
This would be a first for Apple and allow the company to borrow at ultra low rates relative to dollar-denominated debt in six years.
“All-in funding levels in euros are so low for corporates at the moment it makes sense to issue here,” said Jens Vanbrabant, lead money manager at London-based investment firm ECM Asset Management Ltd., “It’s much lower than dollars. There is no doubt investors will like the name.”
Average yield for investment-grade corporate bonds in euros fell to 1.22 percent, two basis points from a record low, according to Bank of America Merrill Lynch index data.
Most of Apple's huge sum of cash is held overseas, and repatriating it to buy back shares or issue dividends would cost the company a considerable sum in U.S. taxes. As a result, Apple has opted instead to borrow, in addition to using its domestic cash, to fund its capital return program.
As of last quarter, Apple had $155.2 billion in cash and marketable securities. Apple has said multiple times that it has no plans to bring its cash back to the U.S. because of high tax rates.
Apple was last time in the bond market in April for a $12 billion deal, following up on last year’s then record-breaking $17 billion sale, according to Dealogic data
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