Apple Capitalizes On Plunge In Yields, Issues Cheapest Bonds In Years

Apple Inc. AAPL has issued $8 billion in bonds to fund share buybacks and dividends.

What Happened

Apple is issuing $2 billion for three years, $2.25 billion forfive years, $1.75 billion for 10 years and $2.5 billion for 30 years in bonds. 

CNBC anchor Wilfred Frost said the coupons are closer to Treasury notes relative to “any other company.”

For the three-year, Apple is paying 0.75%; 1.125% for the five-year; and 1.65% and 2.65% for 10- and 30-year bonds, respectively.

On Tuesday, the 10-year Treasury yield stood at 0.63%, which is near an all-time low.

Why It Matters

The notes will mature in 2023, 2025, 2030 and 2050, according to a preliminary prospectus that Cupertino filed with the Securities and Exchange Commission on Monday. 

Apple has listed Goldman Sachs Group Inc. GS, Bank of America Securities, the investment division of Bank of America BAC, JPMorgan Chase&Co. JPM, and Morgan Stanley MS as underwriters.

Apple has huge cash reserves and last tapped the debt markets in September 2019. The company closed the second quarter with $192.8 billion cash on hand.

AAPL Price Action

Apple shares were trading 0.92% higher at $295.85 in Tuesday's premarket session. 

Photo by Daniel L. Lu via Wikimedia.