Apple Inc. NASDAQ:AAPL could tap into the bond market once again. But this time the company is eyeing euro bonds. Sources familiar with the development told Ben Edwards of The Wall Street Journal that the bond offering could be announced as early as this week. If the report turns out to be true, it will be the first time that Apple has chosen a currency other than the U.S. dollar.
Apple Inc. (AAPL) to build on its solid track record
Sources said that Goldman Sachs and Deutsche Bank will host a call with investors today in London to arrange the offering. The Cupertino company has a solid track record of blockbuster bond offerings. Apple Inc. NASDAQ:AAPL raised huge amounts of money in its previous bond sales. Given the company’s strong credit rating and large cash pile, its bonds usually come with relative low yields. Standard & Poor’s has assigned AA+ rating to Apple, while Moody’s has rated it Aa1.
Last year, the iPhone maker shocked the Wall Street with $17 billion bond offering. It paid 4.483% for 30-year bonds and just 1.068% for three-year bonds. The yields are only slightly higher than the U.S. government bonds. In April this year, the company raised another $12 billion from the bond market. The tech giant used the proceeds of the sale on dividends and buybacks.
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Apple Inc. (AAPL) has no plans to bring back its overseas cash
Now is the right time to take advantage of the record-low borrowing costs in Europe. For instance, 10-year German government bonds yield only 0.84%. Earlier this year, research firm CreditSights said that Apple Inc. NASDAQ:AAPL might raise as much as $5 billion in non-dollar bonds. The Cupertino company ended the September quarter with over $155.2 billion in cash.
However, most of its cash is held overseas to avoid U.S. taxes. If the company brings back part of that money to fund its stock buybacks and dividends, it will have to pay a considerable sum in U.S. taxes. The company has reiterated that it has no plans to bring back its overseas cash.
Apple Inc. NASDAQ:AAPL shares gained 1.25% to $109.35 at 10:52 AM EST on Monday.