Moving Apple Shares Today; Bond Sale In Euro?

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

Disclosure: None.

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Moon Kil Woong 6 years ago Contributor's comment

LOL wonderful. Apple already has a giant cash mountain spending it only on garbage like a UFO headquarters. I suspect they are only doing this to get more support from bankers who want deals to make money given it isn't in US dollars which is in short supply thanks to their dumb dividend policy they had to leverage overseas assets to do.

Apple, wake up, stop playing money games and get someone with creativity before the bankers you rely on eat you alive like the 1990s.

John Fitch 6 years ago Member's comment

They had someone with creativity; unfortunately, he passed away. Cook lacks the innovation Jobs had, and now Apple is under the guidance of a leader with no vision. I firmly believe that Cook will bring about the undoing of the Apple empire.

Johnny Bleiss 6 years ago Author's comment

Steve was truly remarkable - in the Edison league. Tim is not Steve and he knows that, so he is managing Apple very differently. He relies far more on his team and the vision no longer transpires from a single individual, but as a collective effort, but still true to the spirit of Steve Jobs.

Johnny Bleiss 6 years ago Author's comment

The Apple HQ probably says more about the company size than its' spending patterns. In fact they spend proportionally very little on SGA. Now, Apple has a real challenge in making use of overseas cash flows and obviously here they kill two flies. Getting incredibly cheap funding for stock repurchases while paying it back with excess cash flows generated overseas. Pretty clever.