Given its very size, we’d better comment on Apple’s $17b bond issue yesterday. As I said when reporting Apple’s Q1 results, they have committed to return $100b to shareholders by 2015: mostly by way of a share buyback. With $145b in cash, Apple can obviously afford to do this. But most of this cash is held overseas. Repatriating it to the US would incur pretty huge tax charges.
So, they are going to borrow it instead. That way they not only don’t only pay the tax but the interest on the debt is tax deductible! You might think that was not in the interests of the US Govt., but they don’t seem to be in any hurry to change it. Good description on the process from the FT in Apple iBonds.
Anyway, Apple clearly had another hit on their hands yesterday. Just a shame it wasn’t a new product! Apple only wanted $17b – but $52b was offered. Apparently $17b is the biggest corporate debt sale ever.
What is depressing is that all the news from Apple nowadays is ‘corporate’. Big share fall, increased dividend, share buyback, debt offerings. What I really want is a decent new product offering – actually a whole new product genre – to write about.
Apple cool? No.
Apple boring? Yes.