Apple could fund stock buyback with $5 billion bond sale

Apple could fund stock buyback with $5 billion bond sale

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James Bond
The name's Bond. Bond sale. Photo: United Artists
Photo: UA

Apple is reportedly planning to unload $5 billion worth of bonds in its fourth multibillion-dollar debt offering in two years, according to Bloomberg.

The news outlet is reporting that the deal could happen as early as today, with proceeds used for stock repurchases, dividend payments and debt repayments. Apple sold $17 billion of bonds in April 2013, in what was then the largest corporate bond offering of all time. Since then it has issued $32.5 billion of bonds in total.

The reasoning behind going into debt, rather than drawing on its veritable mountain of overseas cash, is that it would be cheaper to do this than to pay tax on the money Apple would have to bring back to the U.S.

Recently, two senators came up with an idea that would allow Apple to repatriate its money at a nominal cost. Even if that does come off, however, one of the conditions was that the money could not be used for a stock buyback.

Deutsche Bank AG and Goldman Sachs are said to be managing Apple’s new debt sale, which comes shortly after Apple’s mind-blowing Q1 earnings report.

Source: Bloomberg