Apple borrows €2.8bn at lowest euro rate on record
APPLE tapped European bond markets yesterday borrowing €2.8bn (£2.2bn) in the cheapest euro bond sale ever with investors clamouring to lend to the iPhone-maker.
The US tech giant offered its first- ever European debt in two tranches with eight and 12-year maturities, with record-low yields of 1.082 per cent and 1.671 per cent respectively.
While Apple outlined the purpose of the funds raised as for “general corporate purposes, including repurchases of our common stock and payment of dividends”, the move also helps diversify Apple’s debt investor base, previously dominated by bonds sold in dollars.
Its last issue was in April, when it released $12bn worth of notes to finance share buybacks and dividends. In 2013 it sold $17bn-worth of debt.
Yesterday’s sale undercut all previous euro-dominated corporate bonds of those maturities, according to Dealogic data, beating Coca-Cola’s previous record of eight-year bonds with 1.2 per cent yields from September.
Last month, the billionaire investor Carl Icahn called on Apple to increase its share buyback programme, claiming the company was “dramatically undervalued”.
CHEAPEST EURO-BONDS
■ Apple eight-year note (Nov ‘14) – 1.08 per cent yield
■ Coca-Cola eight-year note (Sept ‘14) – 1.2 per cent yield
■ BMW eight-year note (Aug ‘14) – 1.3 per cent yield
■ Alfa Laval (Sept ‘14) – 1.5%