Apple Inc. sold $12 billion of bonds to return capital to shareholders in the second-largest U.S. corporate debt offering this year.
The iPhone maker sold the securities in nine parts, with the longest-dated bonds maturing in 30 years, according to data compiled by Bloomberg. Proceeds will also go toward general corporate purposes, including acquisitions and repayment of debt, according to a person familiar with the matter who asked not to be identified because they aren’t authorized to speak on the issue.
Apple issued $2.5 billion of 4.65 percent 30-year bonds at a yield of 2.05 percentage points more than similar-maturity Treasuries. That’s less than the original offer of 2.15 percentage points and a 15-basis-point premium over the average yield on bonds of similar maturity and rating, according to Bank of America Merrill Lynch Indexes.
The company also sold $1.5 billion of seven-year green bonds -- debt that typically backs clean energy and other sustainable initiatives -- in the biggest such offering for a U.S. borrower since Bank of America Corp. sold $600 million of green obligations last May.
“This is exactly the kind of deal you’d expect when the market reopens,” said Thomas Murphy, a money manager at Columbia Threadneedle Investments in Minneapolis, which has about $176 billion in fixed-income assets under management. “It takes three straight days of equities being up and our market can open to high-quality, liquid, well-known issuers, the Apples of the world and the IBMs of the world.”
The sale is Apple’s fifth multibillion dollar offering since 2013. The company issued $8 billion in bonds in May to boost shareholder capital.
Apple’s deal comes as the markets are reopening after a week where issuance of corporate bonds was frozen amid renewed concerns about the health of the global economy. International Business Machines Corp. and Toyota Motor Credit Corp., the financing arm of Asia’s biggest automaker, also tapped investors with bond offerings Tuesday.
“The highest-rated issuers have the ability to get in on the markets whereas I don’t think you’re going to see that same bloom on the low-rated side,” said Jody Lurie, a credit analyst at Janney Montgomery Scott. “Even if they are using it for shareholder reasons, they are flush with cash, they have a certain rating and investors want to own them.”