Apple has sent markets scrambling with the biggest non-bank bond deal in history, priced at US$17 billion, as it looks to placate shareholders in the wake of a fall in earnings.
Reuters reports the six-part offering attracted an estimated US$50 billion of orders in New York in the first day, with bankers believing they may have sold twice the expected amount, despite the current unfriendly trend in the bonds markets.
The move is widely seen as the company’s way of placating restless shareholders.
This debt issue is Apple’s first since the 1990s, with the company is selling the bonds to pay its shareholders through stock buybacks and dividend payments.
“Apple made its intentions clear that this deal is for shareholder-friendly activity, but they have tremendous metrics and brand recognition,” Rajeev Sharma, portfolio manager at First Investors Management Co, told IFR.
“Apple is something everyone wants in their portfolio.”
The plans to issue the six different types of bonds were laid down in a regulatory filing on Tuesday. The bonds duration range is three to 30 years.
Apple’s bond deal comes amid concerns over its shrinking profit margins in the wake of competition from other players in the computing market.
