Apple Inc. tapped the U.S. investment-grade bond market with a $6.5 billion sale in four parts as the tech giant increasingly looks to return cash to shareholders.
The longest portion of the offering, a 40-year security, will yield 0.92 percentage points above Treasuries. Initial price discussions were in the 1.15 percentage points range.
Proceeds from the sale will be used for general corporate purposes, including share repurchases, dividend payments, funding for capital expenditures, and acquisitions. S&P Global Ratings assigned a AA+ rating to the proposed bonds.
Apple, the world’s largest company by market capitalization, has been an active bond issuer of late, capitalizing on historically cheap borrowing costs. The iPhone maker sold $14 billion of bonds in February. Until 2020, Apple hadn’t borrowed in the U.S. investment-grade market more than once in a calendar year since 2017. Now, it’s selling bonds for the fourth time since May 2020.
Apple is focusing on shareholder returns, reducing its massive cash pile with hundreds of billions of dollars worth of share buybacks and dividend payments in recent years.
In its most recent earnings report, Apple reported profit that nearly doubled and record revenue, boosted by strong iPhone sales. But the world’s most valuable company also warned that the torrid pace might be slowing and that chip shortages will contribute to a lower rate of growth this quarter.
Apple continues to make significant investments to support long-term growth. It generated $21 billion of operating cash flow and returned $29 billion to shareholders during the third quarter.
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