Apple sells $12 billion in second large debt sale
Buyback, dividend plan sent stock surging, but add debt
The tech giant issued notes of seven different types, with fixed- and floating-rate maturities varying
between three and 30 years. The offering comes as investors chase strong performance in the high-grade
corporate bond market and issuers look to take advantage of low interest rates while they last.
Apple’s 10-year note was priced to yield 77 basis points more than comparable Treasurys. The pricing
suggests little, if any, gain from buying Apple’s new debt versus its outstanding bonds, said Thomas Urano,
managing director at Sage Advisory Services, who reviewed the deal but did not participate.
Apple maintains the second highest credit-rating from Moody’s Investors Service, reflecting the
company’s competitive market position and strong financial profile. Nonetheless, the rating service said
that continuing to pile debt onto the company balance sheet may eventually be a detriment to bondholders.
Moody’s analysts, led by Gerald Granovsky, wrote in a report affirming the agency’s rating on
Tuesday: “If debt going forward is increased meaningfully more than the $25 billion now expected
by Moody’s that would be negative and could pressure the rating down.”
More at: marketwatch.com
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