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Apple sells $5.25 billion in five-piece dollar bond sales


Apple Inc. ticked the US blue-chip bond market on Monday as a tidal wave of borrowers raised money ahead of key inflation readings later this week.

The Cupertino, Calif.-based company sold bonds in a $5.25 billion, five-piece deal that originally targeted about $5 billion, according to a person familiar with the matter. The longest portion, a 30-year bond, will yield 108 basis points against comparable government bonds, less than the roughly 135 basis points initially discussed, said the person who asked not to be identified because the discussions are private.

Dealers surveyed by Bloomberg expect $30 billion to $35 billion in US high-quality bond sales this week as corporate bond markets show signs of stabilization. A total of 11 companies will issue $22.55 billion in new debt on Monday, tying up funding ahead of the release of the consumer price index on Wednesday, followed by the producer price index on Thursday. T-Mobile US Inc. and Merck & Co. Inc. also brought $3.5 billion and $6 billion in bonds, respectively.

Proceeds from the sale of Apple will be used for general corporate purposes. That could include share buybacks, dividend payments, working capital, capital expenditures, acquisitions and debt repayment, the person said. The sale was Apple’s first since it sold $5.5 billion in August to fund buybacks and dividends.

Apple’s decision to issue billions of new debt owes “more to confidence in growing cash flow than to operational needs,” Robert Schiffman, senior credit analyst at Bloomberg Intelligence, wrote in a note. Issuing bonds with five tranches would be the net cash neutral target, he said.

The deal will be “very well received by the market,” Rob Waldner, chief fixed income strategist and head of macro research at Invesco, told Bloomberg TV before the deal was priced. quality fixed income.”

Apple representatives did not respond to a request for comment. T-Mobile and Merck did not immediately respond to a request for comment.

Apple is the second mega-cap tech issuer to sell bonds after reporting earnings. Facebook parent company Meta Platforms Inc. last week raised $8.5 billion in its second-ever bond sale.

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Joanna Swanson

Joanna Swanson is Europe correspondent at the Thomson Reuters Foundation based in Brussels covering politics, culture, business, climate change, society, economies and inclusive tech. With specific focus in breaking news, she has covered some of the world's most significant stories.