Apple Issues Corporate Bonds Again... $5 Billion Scale

Apple, the company with the largest market capitalization, has launched a large-scale bond issuance aiming to raise $5 billion (approximately 6.6 trillion KRW), Bloomberg News reported on the 8th (local time), citing sources.

[Image source=AP Yonhap News]

According to the report, Apple plans to issue bonds in five tranches with maturities ranging from 2 to 30 years. The maturities are set for 2026, 2028, 2030, 2033, and 2053. The 30-year bond yield is expected to be 1.35 percentage points higher than the corresponding U.S. Treasury bonds.

This is Apple's first bond issuance since August last year, when it raised $5.5 billion to fund share repurchases and dividend payments. The funds raised through this bond issuance are expected to be used for general corporate purposes such as share repurchases, dividend payments, and debt repayment. Apple also announced a $90 billion share repurchase and dividend plan on April 4, immediately after releasing its Q1 (Apple fiscal Q2) earnings.

Robert Schiffman, Senior Credit Analyst at Bloomberg Intelligence, analyzed, "Apple's decision to issue billions of dollars in new bonds reflects confidence in expanding cash flow rather than operational necessity." He also noted that this bond issuance would help the company's 'net-cash-neutral' goal. Rob Waldner, Chief Bond Strategist at Invesco, also appeared on Bloomberg TV and said, "It will be very well received in the market."

Apple is the second big tech company to issue bonds after the Q1 earnings announcement. Earlier, Meta Platforms, the parent company of Facebook, issued $8.5 billion in bonds last week. Bloomberg News reported that as the corporate bond market shows signs of stabilization, up to 15 companies may issue bonds this week ahead of the release of the Consumer Price Index (CPI) and Producer Price Index (PPI).

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