Apple Sells Record $17 Billion Worth Of Bonds To Finance Its Stock Buyback

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Despite having a mountain of cash overseas, Apple has decided it’d be cheaper for the company to go into debt for its stock buyback program, rather than bring the money back to the U.S. to be taxed.

After taking the initial steps yesterday toward offering bonds to investors, Apple opened up its order book today and plans to sell $17 billion worth of bonds. The six-part all dollar offering has already attracted more than $50 billion of orders within the first few hours, in what has become the largest non-bank bond deal in history.

According to a report from Reuters, Apple is offering $17 billion worth of bonds in the following six bond types to investors:

Apple Is Going Into Debt To Finance Its $100 Billion Stock Buyback

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Last week, Apple announced its plans to return $100 billion in stock to investors over the next few years. The increase more than doubled Apple’s original capital return program of $45 billion. Quarterly dividend payments also increased 15%, or $3.05 per common share.

Apple may have a huge cash pile, but even the world’s most valuable company will have to go into debt to finance a return program of this size. It’s the first time Apple has borrowed since 1996.

Tim Cook: Declining AAPL Price Over Past Few Quarters Has Been Very Frustrating

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Apple CEO Tim Cook showed his imprint on Apple during the company's financial call
Apple CEO Tim Cook showed his imprint on Apple during the company's financial call

Apple just released its Q2 2013 Financial results, and even though Apple beat its own estimates, Tim Cook started the Quarterly Financial Call on the defensive.

Cook started the call by explaining how exceptional Apple’s 2012 financial results were for Apple, so it’s hard for the company to improve sales this quarter. Then Cook commented on Apple’s struggling stock price by saying he’s “very frustrated” with the stock’s declining value the last few quarters, but they’re staying focused on the future.

Hoping to appease investors, Apple announced today that it will payback $100 billion to investors by 2015. Apple has yet to release a major product in 2013, but Cook reassured investors that Apple can’t wait to release new hardware and software this Fall and throughout 2014.