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Apple Launches $12 Billion Debt Offering: 30% Smaller Than Last Year's Bond Bonanza

Tyler Durden's picture




 

Despite explaining that the Apple debt offering would be of similar size as last year's epic $17 billion bond issue, the seven-part offering only managed to issue $12 billion. While still considerable in the world of corporate bond issuance, this is a notable drop for a firm that was so adamant about releveraging to turnover its cash to shareholders...

  • *APPLE TOTAL DEBT OFFERING SIZE $12B

The deal's longer-dated bonds came a little cheaper than last year's also at 10Y +77bps and 30Y +100bps and only 29% of the issue was long-dated (as opposed to 50% last year). We remind readers that following last year's huge deal, equity markets weakened notably in the weeks after (and it seems the rate-locks on today's issue are already being lifted in Treasury markets as rates fall).

 

Full 7-part-offering:

  • *APPLE $1.5B 3Y FIXED NOTES LAUNCH AT +18
    *APPLE $1B 3Y FRN LAUNCH AT 3ML+7
    *APPLE $2B 5Y FIXED NOTES LAUNCH AT +37.5
    *APPLE $1B 5Y FRN LAUNCH AT 3ML+30
    *APPLE $3B 7Y FIXED NOTES LAUNCH AT +60
    *APPLE $2.5B 10Y NOTES LAUNCH AT +77
    *APPLE $1B 30Y BONDS LAUNCH AT +100

Cheap - but not as cheap as last year's deal. Also of note is the fact that half of last year's issuance ($8.5bn of $17bn) was in 10 year bonds or longer maturity and only 29% this time ($3.5bn of $12bn).

 

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Tue, 04/29/2014 - 13:54 | 4708688 FlipFlop
FlipFlop's picture

Why does AAPL launch a bond? Some optimal balance sheet stuff...but still..
Why would anyone buy this bond? It gives some yield....

Tue, 04/29/2014 - 14:00 | 4708723 Four chan
Four chan's picture

everything steve jobs worked for is just a tax dodge.

Tue, 04/29/2014 - 14:27 | 4708833 max2205
max2205's picture

I BONDage

Tue, 04/29/2014 - 14:51 | 4708921 Stoploss
Stoploss's picture

Don't forget, perfectly timed with insider selling...

Tue, 04/29/2014 - 19:10 | 4709829 Protokletos
Protokletos's picture

See Dr. Engali below

Tue, 04/29/2014 - 13:57 | 4708704 Bernoulli
Bernoulli's picture

Why why why???

I thought they had such an increadible amount of cash on the "sidelines"??

Crooks!

Tue, 04/29/2014 - 13:59 | 4708711 cougar_w
cougar_w's picture

Because new debt is essentially free in the current bond market.

Tue, 04/29/2014 - 14:08 | 4708745 Dr. Engali
Dr. Engali's picture

Pardon my re-post. I posted this on a previous thread in response to this question:

 

 

It is much more efficient to avoid paying taxes by taking on debt rather than repatriating that cash. They will pay 3.5 % to service their debt vs paying 40% in taxes if they were to repatriate their cash hoard.  Since this is a global issue, once they have the debt they can service it in any manner they wish. They can take the now domesticated cash to reward insiders and share holders with a dividend or buybacks without facing any tax consequences. More than likely a combination of both.

 

It's fucked up and they are another example of a hypocritical liberal company who will support any liberal project that gubbermint comes up with but then they avoid paying for it.

Now that they have run out of innovative ideas, and they never did make anything thanks to Foxconn's sweat shops it's time to loot the company and Joe six packs 401k so that the insiders and the bankers can get paid.

Tue, 04/29/2014 - 14:13 | 4708782 FlipFlop
FlipFlop's picture

Ok. Makes sense. Thanks.

Tue, 04/29/2014 - 14:23 | 4708817 lordylord
lordylord's picture

Nice explanation.  Now explain it to all the anti-capitalist liberals once they look up from their iphones. 

Tue, 04/29/2014 - 14:24 | 4708820 Colonel Klink
Colonel Klink's picture

Corporate money laundering all legal by way of our corrupt CONgressional laws.

Tue, 04/29/2014 - 15:27 | 4709056 JuliaS
JuliaS's picture

Taxes are a punishment for anyone too poor to afford a good accountant.

Tue, 04/29/2014 - 16:51 | 4709380 daveO
daveO's picture

Emphasis on LOOT.

Tue, 04/29/2014 - 13:58 | 4708706 cougar_w
cougar_w's picture

Apple, now with 30% fewer expectations for growth!

Tue, 04/29/2014 - 14:13 | 4708774 Ralph Spoilsport
Ralph Spoilsport's picture

Yes. The Apple fan base is growling about a number of technical issues that aren't being addressed. One example is the mess surrounding iCloud. As more people get tech saavy, they realize they don't need the iPhone walled garden approach. The non-removeable iPhone battery is getting to be more of an issue with people who are caring less about looking trendy. Many are looking closer at Android and even the BlackBerry line ,like the Z10 and Z30, which still have the best security, great battery life, and now have the ability to run most Android apps.

Tue, 04/29/2014 - 14:35 | 4708870 Bangin7GramRocks
Bangin7GramRocks's picture

You lost everyone at Blackberry.

Tue, 04/29/2014 - 14:00 | 4708718 PontifexMaximus
PontifexMaximus's picture

The average joe 6 pack taxpayer in the US is so happy.

Tue, 04/29/2014 - 14:03 | 4708735 locklimit
locklimit's picture

Must be nice to skip paying taxes

Tue, 04/29/2014 - 14:22 | 4708815 Colonel Klink
Colonel Klink's picture

401k, pension, and MyRA lambs being lead to the slaughter.

Tue, 04/29/2014 - 14:53 | 4708925 TalkToLind
TalkToLind's picture

I wish I had the presstitutes talking about my company and products every night on national and local "news" shows.  If they did that for me, I wouldn't need to issue any friggin debt offerings.

Tue, 04/29/2014 - 15:03 | 4708966 somebuyinthebeach
somebuyinthebeach's picture

Total buy.  My 30 year Honeywell, Burroughs, and Atari bonds are still paying out!  Great investments!

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