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Apple Inc. |
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| InstrumentType |
Coupon |
Benchmark |
Margin |
Currency |
AmtIssued |
Issue Date |
AmtOutStanding |
MaturityDate |
Seniority |
| Bond |
0.45% |
|
|
USD |
1,500,000,000 |
03 May 13 |
1,500,000,000 |
03 May 16 |
Senior Unsecured |
| Bond |
|
3M USD-LIBOR-BBA |
0.05% |
USD |
1,000,000,000 |
03 May 13 |
1,000,000,000 |
03 May 16 |
Senior Unsecured |
| Bond |
1.00% |
|
|
USD |
4,000,000,000 |
03 May 13 |
4,000,000,000 |
03 May 18 |
Senior Unsecured |
| Bond |
|
3M USD-LIBOR-BBA |
0.25% |
USD |
2,000,000,000 |
03 May 13 |
2,000,000,000 |
03 May 18 |
Senior Unsecured |
| Bond |
2.40% |
|
|
USD |
5,500,000,000 |
03 May 13 |
5,500,000,000 |
03 May 23 |
Senior Unsecured |
| Bond |
3.85% |
|
|
USD |
3,000,000,000 |
03 May 13 |
3,000,000,000 |
04 May 43 |
Senior Unsecured |
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| * Barclays U.S. Aggregate, Standard & Poor's U.S. corporate
and other major bond indexes are expected to include $14 billion of the $17
billion in bonds Apple Inc. sold May’13, said Colin Robertson, managing
director-fixed income, Northern Trust Asset Management. S&P expects to
include $14 billion of the Apple bonds in its S&P U.S. Issued Investment
Grade Corporate Bond index, based on the rules criteria for eligibility. The
S&P U.S. Issued Investment Grade Corporate bond index has a market value
of $3.4 trillion as of first week of May'13 closing after its monthly
rebalancing and a face value of $2.9 trillion. The index had 4,308 bonds,
issued by 1,063 companies as of Monday's close. Apple would represent 0.4% of
the Barclays U.S. Investment Grade Corporate bond index and 0.1% of the
Barclays's U.S. Aggregate bond index, Mr. Robertson said. Apple's bonds are
rated AA+ by S&P and AA1 by Moody's Investors Service. |
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| ** Apple began offering the bonds as a way to raise $100 billion
in capital to fund share repurchases and dividends. The company doesn’t
technically need to raise its debt, but it chose to do it through bonds
because the current rates are extremely low. Also the tech company didn’t
want to dip into the $145 billion in extra cash it has. It has said that more
than $100 billion of it is offshore and would bring corporate taxes with it
if it were repatriated, but many investors believe that Apple would bring
that money home if it ended up being short of the interest payments it will
have to make on the bonds it offers. |
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| *** On April 23, 2013 Apple Inc announced that its Board of
Directors has authorized a significant increase to the Company’s program to
return capital to shareholders. The Company expects to utilize a total of
$100 billion of cash under the expanded program by the end of calendar 2015.
This represents a $55 billion increase to the program announced last year and
translates to an average rate of $30 billion per year from the time of the
first dividend payment in August 2012 through December 2015. |
| As part of this program, the Board has increased its share
repurchase authorization to $60 billion from the $10 billion level announced
last year. This is the largest single share repurchase authorization in
history and is expected to be executed by the end of calendar 2015. Apple
also expects to utilize about $1 billion annually to net-share-settle vesting
restricted stock units. Additionally, the Board has approved a 15% increase
in the Company’s quarterly dividend and has declared a dividend of $3.05 per
common share, payable on May 16, 2013 to shareholders of record as of the
close of business on May 13, 2013. Apple is among the largest dividend payers
in the world, with annual payments of about $11 billion. |
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**** Experts interviewed
by Reuters said Apple Inc. (NASDAQ:AAPL)’s liquidity is actually working
against it when it comes to CDS because investors only buy CDS if they
believe the credit will fall apart. Since Apple Inc. has so much extra cash
it isn’t likely to default, so there’s little need for CDS. However, others
believe that there are still risks involved in buying Apple Inc. bonds,
especially those that mature in 30 years, because the life of a technology company
can be quite unpredictable in the long term. Other experts told Reuters that
the liquidity of Apple’s bonds means it’s easier for investors to simply
short the bond rather than the CDS.
For any further information please email support@factentry.com |
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