Apple to go into debt of $ 17 billion to buy back its own shares

by bold-lichterman

An operation much less expensive than drawing on its 150 billion dollars of cash …

It may well be one of the most important deleveraging phases for a private company ever. According to Financial Times, Apple is said to be preparing to sell the equivalent of $ 17 billion in bonds, which would amount to the second largest such deal in the world.

The objective of this titanic transaction: to buy back its own shares on the market. The firm at the apple had explained last week wanting to accelerate its policy of capital buyback by increasing its target from 60 billion buybacks to 90 billion dollars.

The American giant is said to plan to use the proceeds from the sale of the debt to finance the repurchase of shares rather than drawing on its 150 billion dollars in cash. Soliciting its cash is indeed an operation more complicated than it seems: of the 150 billion available, 88%, or 130 billion, are located abroad. And repatriating them would lead to a 35% tax, explains the British daily …

An operation that targets European players

Consequently, this bond sale would in principle target mainly European players in the euro zone, where interest rates are lower than in the United States. It aims to diversify Apple’s debt investor base.

The Cupertino-based company had already sold $ 17 billion worth of bonds a year ago, which was the largest sale of corporate debt in the world at the time. A record eclipsed five months later when telecommunications company Verizon sold the equivalent of $ 49 billion in bonds to help finance the acquisition of 45% stake in Verizon Wireless.