As was expected, Apple on Thursday issued its first Australian dollar denominated bond issue. One report indicates the issue has already raised AU$1.2 billion (around $883 Million USD).
Apple’s first Australian issuance came in the form of a two-part “benchmark” bond sale consisting of four- and seven-year notes, reports The Sydney Morning Herald.
The Herald says the price guidance of the fixed and floating rate four-year bonds is set at around 3%, with the seven-year bonds being offered at 3.80%. That is 0.7% and 1.15% over bank rates, respectively. The bond issue is being managed by Goldman Sachs, Commonwealth Bank and Deutsche Bank.
While in the past, Apple had usually sold its debt in U.S. dollars and Euros, the company has recently taken an interest in doing so in other currencies. The company raised around $1 billion in a Swiss franc-denominated offering in February, $2 billion in yen-denominated bonds in June, and $2 billion in British pounds in July.
While Apple is currently sitting on a $220 million cash pile, over $190 billion of that is held offshore. The company is believed to be using part of its debt offerings to finance its domestic capital return program. Issuing debt is cheaper than the high U.S. tax bill the firm would face if it repatriated any of its offshore cash hoard.