Apple prepping first Australian dollar-denominated bond offering - report

This is a discussion on Apple prepping first Australian dollar-denominated bond offering - report within the Australia and NZ Dedicated Apple Forum forums, part of the Regional Apple Forums category; Apple will reportedly continue to diversify its corporate debt issuance strategy with a new bond denominated in Australian dollars, the company's latest move to raise ...

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    Apple prepping first Australian dollar-denominated bond offering - report




    Apple will reportedly continue to diversify its corporate debt issuance strategy with a new bond denominated in Australian dollars, the company's latest move to raise debt outside the United States in order to fund its growing capital return program.

    Apple is expected to raise at least A$500 million ($369 million), but the offering could go as high as A$1 billion, one Australian banker told Reuters. If it trends toward the higher end of that range, it would be among the largest bonds ever floated in the Australian market.

    There is no word on when the so-called "Kangaroo" offering could take place, but Apple will likely begin calls with investors on Tuesday.

    Apple issued its first foreign currency bond last November, raising $3.5 billion with a euro-denominated offering. That was followed by a $1.08 billion Swiss franc bond in February of this year, a $2 billion yen debut in June, and a $2 billion sterling issue in July.

    The bonds are primarily used to fund Apple's massive capital return program, which is targeted to hand $200 billion back to shareholders through dividends and buybacks by the end of March 2017. While Apple has more than $220 billion in cash and marketable securities, much of it more than $190 billion is held in its foreign subsidiaries.

    Thanks to U.S. corporate tax policy, which would require Apple to pay another round of taxes on that money if it were to come back to the U.S., issuing debt is significantly less expensive than repatriating Apple's foreign cash.





    8-17-15

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    Apple issues first Australian bond, raises more than AU $1.2B






    As anticipated, Apple on Thursday local Australia time issued an Australian dollar-denominated bond that according to one report has already reached AU$1.2 billion, or about $883 million.

    Apple's first Australian issuance came in the form of a two-part "benchmark" bond sale consisting of four- and seven-year notes, reports The Sydney Morning Herald.

    The publication notes price guidance of the fixed and floating rate four-year bonds is pegged at around 3 percent, while the seven-year bonds are being offered at 3.80 percent, or 0.7 percent and 1.15 percent over bank rates, respectively. Apple's Australian bond is managed by Goldman Sachs, Commonwealth Bank and Deutsche Bank.

    Reports earlier this week suggested Apple's debt offering would be land somewhere between AU$500 million and AU$1 billion.

    Prior to today's bond sale, Apple notably sold debt in U.S. dollars and Euros, but has more recently taken an interest in low rate areas in Asia and Europe. For example, the company raised about $1 billion in a Swiss franc-denominated offering in February, $2 billion in yen-denominated bonds in June and another $2 billion in British pounds last month.

    Apple is thought to be leveraging international debt to fund its domestic capital return program. The company is slated pass $200 billion back to shareholders by the end of March 2017, but is reluctant to repatriate overseas cash due to high U.S. tax rates. Of its $220 billion cash hoard, more than $190 billion is held by offshore subsidiaries.





    8-20-15

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