MacTrast reported yesterday that the upcoming Apple bond sale would include a component denominated in euros. The company has today filed a prospectus with the Securities and Exchange Commission outlining its general plans.
The sale will include two chunks of debt, with staggered dates of maturation. The offerings yields will be the lowest ever for 8-year and 12-year debt.
The Wall Street Journal, via MacRumors:
The iPhone maker is seeking to raise at least €1 billion ($1.2 billion) from two chunks of euro debt maturing in eight and 12 years.
Those would beat the lowest yields ever paid for euro-denominated, corporate bonds of these maturities, according to Dealogic data, reflecting solid confidence that the bonds represent a safe bet. Bankers managing the bond sale suggested the eight-year notes will give investors a yield of roughly 1.1% and the 12-year notes around 1.7%.
Apple spoke with investors on Monday about issuing bonds and will use the proceeds of the sale for general corporate purposes, including share buybacks and dividend payments.
This will be the first time Apple would begin issuing bonds in euros. Deutsche Bank and Goldman Sachs will arrange the sale.
Due to record-low levels of borrowing costs in Europe, now is considered an ideal time for Apple to issue a bond deal in euros. The money earned by the bond deal would be used by Apple to finance its stock buybacks and dividends to investors.
While Apple could repatriate the massive sums of cash it now holds overseas, it would cost the company a considerable amount in U.S. taxes. As a result, borrowing the money is actually cheaper for Apple than accessing its overseas cash hoard. As of last quarter, Apple held $155.2 billion in cash and marketable securities.
