September 18, 2022
Apple Four Part Bond Sale Fund Backs Dividends, YT Trending - Latest Technology News

Apple Inc.

Company received highest possible credit rating in December

Apple Inc. is entering the high-grade bond market with a sale in as many as four parts.

According to one person familiar with the matter, the longest portion of the offering, a 40-year security, may yield around 150 basis points over US Treasuries.

Apple Four Part Bond Sale Fund Backs Dividends, YT Trending - Latest Technology News
Apple Inc.

The proceeds of the sale will be used for general corporate purposes, such as financing share buybacks and dividends, according to the person, who requested not to be named because the details are private.

The sale comes after the US primary market for investment-grade bonds reopened in the second part of July amid a credit market boom. After reporting profits, many of the larger banks sold substantial amounts of debt, allowing supply to exceed estimates for the month. The trend is anticipated to continue this week, with Wall Street syndicate desks anticipating approximately $30 billion in additional high-grade bond issuance.

Apple, one of eight businesses selling new high-grade bonds on Monday, looks to be capitalizing on the corporate market’s recent stability and lower borrowing costs. Bloomberg’s benchmark investment-grade index yield fell to a nearly two-month low on Friday.

The iPhone manufacturer has about $180 billion in cash and cash equivalents on hand, and it has paid out around $14 billion in dividends over the previous three years.

“Apple continuously borrowing tens of billions of dollars every year is due to its confidence in rising cash flow rather than operational demands,” Bloomberg Intelligence analyst Robert Schiffman said Monday.

Apple Four Part Bond Sale Fund Backs Dividends, YT Trending - Latest Technology News

According to the individual, Goldman Sachs Group Inc., JPMorgan Chase & Co., and Bank of America Corp are leading the sale.

Moody’s Investors Service increased Apple’s long-term credit rating to Aaa in December, joining Microsoft Corp. and Johnson & Johnson as the only US businesses in the S&P 500 with the highest possible credit rating.

 

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