Apple Inc., the iPhone maker seeking to help finance a $100 billion capital reward for shareholders with borrowed money, is planning a six-part bond offering for its first sale in almost two decades.
The company intends to issue debt that includes floating-rate notes maturing in 2016 and 2018 and fixed-rate securities due in 2016, 2018, 2023 and 2043, Apple said in a regulatory filing. Proceeds may help Cupertino, California-based Apple avoid so-called repatriation taxes on its $102.3 billion of funds held overseas as it returns an additional $55 billion to shareholders through 2015 to compensate for a stock that’s been hammered by signs of slowing growth.
The offering, being managed by Goldman Sachs Group Inc. and Deutsche Bank AG, follows a $1.95 billion dollar sale from Microsoft Corp., the world’s biggest software maker, which last week issued $1 billion of 10-year, 2.375 percent securities to yield 70 basis points more than Treasuries, according to data compiled by Bloomberg.
The Microsoft bonds traded Monday at 100.2 cents on the dollar to yield 2.35 percent, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
While Apple’s $145 billion of cash is more than the combined funds of every AAA rated U.S. company including Microsoft, it failed to win the bond market’s highest credit grade from Moody’s Investors Service and Standard & Poor’s. Moody’s rated the firm Aa1 with S&P giving it a grade of AA-plus.
Microsoft, along with Johnson & Johnson, Exxon Mobil Corp. and Automatic Data Processing Inc., is rated Aaa by Moody’s and AAA at S&P. Apple last issued new debt in 1996, Bloomberg data show.
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