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Apple Launches $17 Billion Bond Offering: Largest Ever For Non-Financial Firm
And there it is. Moments ago Bloomberg disclosed the final terms of the just launched Goldman-led syndication of AAPL paper. The total size: $17 billion, which surpasses the previous record set by Roche at $16.5 billion, and makes it the biggest corporate bond synidcation in history. The breakdown:
- $1B 3Y FRN LAUNCH AT 3ML + 5 BPS
- $1.5B 3Y FIXED NOTES LAUNCH AT + 20 BPS
- $2B 5Y FRN LAUNCH AT 3ML+25 BPS
- $4B 5Y FIXED NOTES LAUNCH AT + 40 BPS
- $5.5B 10Y FIXED NOTES LAUNCH AT +75 BPS
- $3B 30Y DEBT LAUNCHES AT +100 BPS
30 Year paper in a tech company whose market cap has fluctuated by roughly $500 billion in the past year, and yielding just under 4%?
Sold to you.
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stay aheqd of the curve https://twitter.com/tfpletter/status/328963510715432961
OK, they're ringing a bell here, boys & girls....we've seen the high water mark in the great bond bubble of 2007-2013.
need MOAR money to sell MOAR Ipads
Yesss, we wants it.
Is it a new?
A) Perpetual-motion machine?
B) Tail to wag the dog?
C) Money laundering operation?
D) All of the above?
No, just using the proceeds to buy gold/silver bullion and stick it in the basement of that new spaceship shaped head office.
They will use the proceeds to exchange for the ships hovering capabilities. Being suspended 300ft above the earth should ensure they have soviergnty from the implosion of California.
They will use the proceeds to exchange for the ships hovering capabilities. Being suspended 300ft above the earth should ensure they have financial sovereignty from the fiscal implosion of California.
Launch a bond in the USA to raise operating capital in the US because they cant repatriate $$$ from overseas without paying taxes on it.
The additional capital overseas on the books offsets the appearance of debt and the stock still looks good.
Did I miss anything?
when apple comes out w/ iGold, sell sell sell!
Not sure that is the case. I think they have the mistaken perception that they can buy the federal government with all that cash, only problem is the current owners are not selling.
Why are they borrowing when they have 100 billions in cash? and what will this do to the cashback program? doesn't make any sense? Unless they're counting on further currency debasement. Must have gotten the private Bernanke memo.
I answered this question a little further up so I'm sorry for the double post.
They don't have to repatriate the billions in cash and pay taxes on it. Instead they leverage the company out to pay a dividend and buy back shares. The sheeple get a few bips and squiddy makes a mint.
As well, AAPL's cash is invested in a hedgefund Braeburn Capital....given how the returns of that fund is, its probably invested in illiquid shit. Apple's strong financial position is a mirage and will disintegrate quickly if the markets tank big.
http://www.cultofmac.com/193692/the-mysterious-company-that-manages-appl...
In effect they don't have cash and need it now. That's why you do an offering. It's definitely not because things are going well. And in the past few days we have Apple, US airways, Margin Stanley, Dish Network, JP morgan, Verisign, Rosetta, Microsoft, and Walmart, just to name a few, that have announced they need cash and are going to issue bonds. Everyone needs cash suddenly. Not good.
Cash is overseas and expensive to repatriate, whereas cash at home is cheap to borrow. +100 for 30yrs in today's rate environment, for a hardware manufacturer in the fickle consumer mobile market...that is fucking insane!
Why? Simple, repatriation of their cash is more costly (because of the taxes) then issuing the bond. Fucking duh! At least you know they have the fucking cash to pay back any money you lend them.
OK. All good points about repatriating the cash overseas, but........
Life is hard in the tech world. You have a lot of competition and need to reinvent yourself every nine months. Soooooo....why not do as so many before you have done.
Financialize!!!!!
Remember all of those great old line companies which turned to real estate speculation: General Electric, General Motors, hmmmmmm. I am sure that there are others. It is ever so easy to turn those departments intended to finance the sale of one's own product into ..... well....real estate holding companies. And it never goes down.
So it is with Apple. Sell those bonds at the top intending to purchase then back at half off when the bond market tanks.
Remember the good old days when Angelo Mozilla was issuing debt during the middle of the real estate crash to buy Countrywide stock - because he had options on it. You know....sell debt when it is cheap to buy stock back when it is dear - and leave the company with a huge debt service burden. One of the few people I want to see in jail more than Jon Corzine.
At least if Apple turns around and buys its own stock, it won't have done it at the top. And here it has sold debt at the top. Not a total abortion. Oh wait. Why is it again that they didn't issue new stock at $700 as opposed to today $450ish? I mean...this financing need grew up overnight, right?
The iBond deal is really well engineered. I do not see a problem here.
I have a bucket of rusty old bolts here....I wonder if Goldman wants to under write that for a few $billion worth of 30 year bonds?
"30 Year paper in a tech company whose market cap has fluctuated by roughly $500 billion in the past year, and yielding just under 4%? "
and i'd still take it over a 30yr ust
wrong. chances of the "big one" occurring during the next 30 years are too high. Apple should have built it's new campus in Montana, not directly over the San Andreas fault.
Have you heard of the Yellowstone Caldera?
there is nowhere to escape, we are doomed http://volcanoes.usgs.gov/observatories/yvo/index.html
Not doomed, just a well deserved rest for us all. ; )
On a long enough timeline...
On a REALLY long enough timeline, the whole earth will be consumed by the sun so technically all of this we do every day is just wanking.
No, we are living in a simulation. I'm determined bunch of code who just might win this thing, aren't you?
Insurance payment is considered revenue.
Fonz, I read your post in the first apple story today...I'm thinking there will be a series of heart attacks in America over the next 7 year's that will continually weaken the country.....next coronary will be 2015.....apple makes touch screen devices......that's it...their operating system is nothing special next to Google's.....they will not be the dominant player in 5 years.....
i guess i should clear this up, I would never own either. If i had to choose I like their balance sheet better than the treasury.
Muppet fruit.
Suckers.
Marginally better that a 30yr UST at this point .SOL rated.
So they borrow money so they don't have to repatriate the money to pay a proper rate of tax.... dirt cheap amount to pay at 4%!
That was my first thought when I saw this offering....
... so they don't have to repatriate the money to pay a proper rate of tax.
So, what's a "proper" rate of tax? They already paid taxes in the countries that the profits were earned. Why should they be double taxed?
The average corporate lasts 12 years.
In 30 years time Apple won't exist.
I'd love to see how bond holders figure on the subordination "pyramid" in the event of some corporate calamity.
Above the equity holders whose dividend these issues will be funding.
I'm guessing CBs will suddenly start to diversify into corporate bonds very soon then, starting with Apple.
Eventually, it has to get back to the taxpayer. The taxpayer is quite helpless. In this case the rapists would penetrate via both the front and back doors.
In 30 years time, Google, Amazon, and Apple will have merged to form Gamazoople...
Appamagoo
...another federal agency.
They may be around to pay back the 3 year.
The end
Fucking sickening. All that cash they are sitting on and they leverage the company up just to have the pleasure of sucking squiddy's dick.
It is kind of remarkable isn't it Doc?
I would say yes, but sadly nothing surprises me any longer with these greedy bastards.
Im just wondering why the people running AAPL feel the need to do this nonsense when they don't need the money.
They don't have to repatriate the billions in cash and pay taxes on it. Instead they leverage the company out to pay a dividend and buy back shares. The sheeple get a few bips and squiddy makes a mint.
Share buyback makes the management options valuable....
we buy their products....
none of these giant frauds pay any taxes. It's sickening.
Just think, if there weren't taxes, we'd be a lot closer to leveling the playing field.
What, no 100-year bonds? Chicken shits.
I'm assuming that space is being saved for the BIS, who will use them to "recapitalize" the new system.
have to wonder if this deal plus Gundlach's record IPO will mark some kind a peak
will apple (via braeburn) buy cds on itself
So when the bond market blows up, we know where to look for the first mushroom cloud.
What's the $ price of 4's @ a 13 basis, like 37.389 or something..??
Awesome.
Last chance to goose the muppets, before it all goes downhill. This is Facebook Squared.
You liked this.
Couldn't they just become a bank holding company and borrow from the FED at zilch?
pods
Can't I just finance my iPad at 92 months with 3.5% apr instead?
This is actually a tax management scheme. Off shore cash hoard stays off shore.
We may have a winner here.
Yeah it's a tax play, but more importantly it's Apple caving in and playing ball with Wallstreet. I look forward to the next outside company making a 1984 big brother commercial about Apple and airing it during the stooperbowl .
I'm with you doc....Ben jamie and Lloyd need La Familia to chase some real yield....a couple of phone calls and ahorse's head in Cook's bed and voila.........
Since all production costs are offshore it makes (some) sense that the money stays offshore.
But I can picture a scenario where *headquarters* move offshore (for any reason) and the debt stays with a new "apple.us" branch left to rot.
Got junked by Corzine.
Why onshore and pay taxes? Issue bonds and let the lemmings line up for a few bp's.
This world just gets more interesting by the day.
And government really shows how fucking useless they are becoming.
This is simply good business under the circumstanes. Look, the system is broken and isn't going to get fixed any time soon.
The system is not broken at all, as figura shows, on the contrary, it works extremely well.
The Japs will be all over this, like a hobo on a ham sandwich.
Insane. Totaly insane. This is what happens when you give other peoples money to sick sociopathic bastards. Just check JNK. Gone apeshit
More bollocks.
This firm makes toys for kids that havent grown up yet and is the biggest in the world?
I will take a bet now saying IApple wont be around in ten years. Who the fuck needs a toy for doing real stuff? Can an apple plant seeds, till a garden, paint a wall? Fuck me, all you see is over grown kids wandering around talking to some fucker on a fucking toy and not interacting in the world around them.
Wait till they switch the fuckers off, who knows what ill equipped over grown kids are capable of when their toy doesnt work? My bet is either mass starvation or mass crying they cannot tweet one an other.
Stupid fucking sheep.
I'm with you. No matter how hard I tried, I couldn't get that Ishit thingy to pound the 6" round fence posts. Got tired of beating the posts with the Ishit thingy after a while. Makes for a good lunch pad on top the good ole' conventional post pounder. Then I got thinking and wondered if I could use any of the Ishit thingies to attach the farm fence wire to the posts? Nah. Probably won't work either. At least it keeps my tractor's seat dry and occasionally I can use it to take notes and keep records. Not that I wasn't able to do that in the days before Ishit thingies.
My kids are nuts about "Angry Birds" and other nonsense games. So I take them out in the field with me and they can shoot some birds with their pellet rifles and see how angry they get in real life.
Back to my fun in the sun planting for the day when Wall Street gets its ass kicked.
Well, they do make good cat toys.
Brilliant walkure.
I get irate over Ishit as my older brother (44 years old) has had each and every one of these over priced fucking toys, and never stops gloating how the next one is out in eight months? Eight fucking months? I have an old nokia 5510 that still does what I need it for, as in make calls and cannot for the life of me see how a fucking toy can do anything other than distract you from real life.
Maybe thats what they are for, but I know one thing, I expect something that cost the thick end of £500 to last more than eight fucking month????
Sorry bro', you is one stupid fucking sheep, same as this toy making company. Fucking sheer lunacy.
I 96,
How did Mom separate you two when you rumbled..? Sounds like she had her hands full...!!
WTF II
He is five years older than me and is still as hard now as he was then, good for me he doesnt ZH and know I'm here or he would give me a right fucking hiding.
Still, I call a spade a spade and he is a stupid fucking sheep for buying overpriced eight month obsolete shit for overgrown kids.
Shhhhh, you aint seen me right.
While I agree with you, I will take that bet.
bernanke's insanity ...
The 5Y seems raisonable to me.... Apple is still better than uncle Sam... and Apple at least sells somenthing and has +120B ...
iAm iCracking up with the giddy giggles of someone losing iSanity.
The most cash rich company in iAmerica selling iDebt?
WE HAVE LOST OUR FUCKING MINDS!
They are losing their ass in the stock market though. This can't be a good sign...
Well, once again, Microsoft did it first.
It's not like they can earn a better rate of return by investing in their business, so they play the finance game, slowly consuming their capital over time, as they pay their employees (and other bills) for doing nothing productive.
30 Year paper in a tech company whose market cap has fluctuated by roughly $500 billion in the past year, and yielding just under 4%?
Sold to you.
Well, going that long is insane in this IR environment period. But as long as AAPL's cash/hedge fund stands behind its debt service (even minus the taxes) what's not to love (relatively speaking), especially on the shorter end? This thing will be way over-subscribed.
That 4% is going to look fantastic in 30 years...
this sure makes my decision to switch to Android easier - fuck Apple
iOu's
End of the brief history of dividends and any future expectation for regular shareholders?
Don't bond holders move to the front of the line?
This just might bring back Jobs from the dead...
Great, Apple issues the iBond.
Is it the repatriation tax that is keeping money from flowing back to the US? Or is it foregin capital controls keeping it offshores?
Are they going to buy back their stock with the $17B offering? What is the use of cash? How about buy a carrier? http://www.deadzones.com
Maybe AAPL's "cash managers" in the non-descript out of the way offices near Cupertino had some tading glitches and can't find some of the loot..??
ps 30 years in tech is like 3,000 years in sovereigns..!!
iBond! Rev.007
Available at a GS Wealth Specialist near you. Killer deals made discretely.
Does this mark the low for interest rates?
now we know why jobs had to die.
now we know why filhy pig earth rapist al gore and rothschild chums with help from the cia mossad cancer dosed stevie.
he had to die
Ok, I'll bite (that apple): You must be in a higher orbit... Just what do they hope to accomplish that Steve could or would not do?
They need even more cash?
Exactly! They have at least $100 billion in the bank and they want to borrow money from the public? And the deal is led by Goldman? Could the writing on the wall be any clearer than that? The stock bounces a bit over the next month perhaps, then drops to $250 by year end and AAPL buys their own shares back at half price, on borrowed money. Still have their cash to boot. Nice work when you can get it.
30yr is the short end in the new normal.
Smart move...the real question is can they profitibly innovate without Jobs.
+1 Apparently the innovation has shifted to their balance sheets.
It's the R&D costs for the watch phone as someone pointed out above when you can't bring your profits home because of tax it still needs financing.
I really expected Apple to pass the competitors and offer 100y bonds here
Homburger advised Roche on Financing re Genentech Acquisition March 2009Homburger advised Roche as to Swiss law in connection with the financing transactions related to its USD 46.8 billion acquisition of the 44% publicly-held interest in Genentech. The transactions included (i) a USD 16.5 billion bond offering, (ii) a combined EUR 11.25 billion and GBP 1.25 billion bond offering, (iii) a CHF 8.0 billion bond offering, and (iv) a USD private placement.
According to media reports at the time, (i) the USD 16.5 billion bond offering was the largest USD-denominated corporate bond sale and the second-largest company bond to date, (ii) the combined EUR 11.25 billion and GBP 1.25 billion bond offering was the largest euro bond financing from a corporate and included the largest single-tranche fixed-rate corporate euro bond and the largest single-tranche sterling corporate bond deal (excluding government-backed issues) to date, and (iii) the CHF 8.0 billion bond offering included the largest Swiss franc corporate bond sale to date.[source]
Roche bond deal was about holding the keys to the human genetic grail. This is (allegedly) about consumer electronics and tax.
Apple better be pulling out Star Trek gadgets and a new model of society from their space-ship for this to make sense.
Ahh, perhaps I just don't understand anymore...
Link dump, in the spirit of 30 years of Apple products to come!:
Russian Energy Minister, Alexandr Novak, and EU Energy Commissioner, Gunther Oettinger, have signed a document for energy cooperation between Russia and the European Union until 2050. The Road Map declares the strategic aim of cooperation is to create a “pan-European energy space.” [source]
Secret Files Reveal Rothschild’s Offshore Domain [source interesting site, and unlike Infowars spam, actually worth a nose around. Certain ZH readers probably already know about it though, hunting for their names to come up]
The United States and ten governments from around the Pacific are meeting yet again to hash out the secret Trans-Pacific Partnership agreement (TPP) on May 15-24 in Lima, Peru. The TPP is one of the worst global threats to the Internet since ACTA. Since the negotiations have been secretive from the beginning, we mainly know what's in the current version of this trade agreement because of a leaked draft [PDF] from February 2011. Based upon that text, some other leaked notes, and the undemocratic nature of the entire process, we have every reason to be alarmed about the copyright enforcement provisions contained in this multinational trade deal.[source the ethos behind CISPA never dies, it just gets renamed]
Of course, the UK is way ahead of the game:
Amateur and professional illustrators and photographers alike will find themselves ensnared by the changes, the result of lobbying by Silicon Valley and radical bureaucrats and academics. The changes are enacted in the sprawling Enterprise and Regulatory Reform Act which received Royal Assent last week, and it marks a huge shift in power away from citizens and towards large US corporations.
How so? Previously, and in most of the world today, ownership of your creation is automatic, and legally considered to be an individual's property. That's enshrined in the Berne Convention and other international treaties, where it's considered to be a basic human right. What this means in practice is that you can go after somebody who exploits it without your permission - even if pursuing them is cumbersome and expensive.[source]
Random history lesson:
The capture of Basra, 5 - 21 November 1914
5 November 1914
The orders given to Brig-General W. S. Delamain - commanding Indian Expeditionary Force 'D' - were to protect the oil refineries, tanks and pipeline at Abadan and cover the landing of reinforcements if these should be required. Only if hostilities with Turkey were to become fact should he try to occupy Basra too, and to do this the rest of the 6th (Poona) Division of the Indian Army would arrive. News came through that Turkey had attacked Russia on the Black Sea coast, and war was declared on this day.[source Naive me just learnt that WWI was about oil, gosh I feel silly, I thought it was about Anarchists and Princes]
I'll stop now, you know what they say.
Brought to you by the market-distorting, muppet-raping, life force-sucking antics of the Chairsatan and his overlords. This is one glaring example of how perfectly fucked we are.
This money is to be used for Executive Bailouts, the overseas money is to be invested in a loan to Executive Swiss Bank Accounts.
Apple believes it can't borrow on these terms again, its cashflow is compromised by having no relevant products to sell.
iOS developers have learned Android now. Musicians overseas don't use the "Apple Store" for thier income.
Apple Laptops are shiney boxes without relevant "Software". Apple has not Updated the Mac Pro Workstation in several years and its become useless. Apple discontinued all business and server products. Apple lost its core audience of Music Studios and Media Professionals.
Apple Phones are amazing brics with soon to be dying batteries. When the 4s reaches end of battery life the remaining die hards will get a Android/FirefoxOS/Ubuntu mobile.
AAPL now HAS a Cracked Screen, needs help. Replacement too costly. Maybe it can buy Nokia/RIM and get a stock bump?
Apple sells 4 gig RAM (oh, sorry, I meant "Apple Memory Module") for $150. The fact they deliberately renamed an industry standard so the chimps couldn't accidentally price compare easily tells you everything about their business model.
Build yourself a cult, rip off the monkeys, but never, ever, ever, think you're above being called on your embarrassingly transparent wank.
1969 bitches.