Apple has sold $14 billion in bonds to take advantage of the current low interest rates in order to return more cash to shareholders, says a report by Bloomberg.
The company issued debt in six parts. The longest portion of the offering, a 40-year security, will yield 95 basis points above Treasuries, after initially discussing between 115 and 120 basis points, according to a person with knowledge of the matter, who asked not to be identified as the details are private.
As noted by the Bloomberg report, until 2020, Apple hadn’t borrowed in the U.S. investment-grade market more than once in a calendar year since 2017. But the current low interest rates proved too tempting for the company to pass up in its pursuit of aggressive share buybacks and dividends.
Apple may also use some of the money for working capital, capital expenditures, acquisition, and repayment of its debt, according to Bloomberg‘s source.
Apple has been hoarding cash for years but has lately been working to reduce its net cash position. It has done this largely through payouts to stockholders. The company may need to expand its annual shareholder returns to over $100 billion to reach its net-cash neutral target over the next few years
Apple’s revenue in Q1 2021 topped $100 billion for the first time.
