Skip to content
Subscriber Only

Apple, Oracle Dump Bonds and Create $300 Billion Market Hole

  • They’ve stopped storing cash in short-term debt of other firms
  • As biggest buyers become sellers, interest rates head higher
An Apple Inc. billboard stands in San Francisco, California, U.S. 

An Apple Inc. billboard stands in San Francisco, California, U.S. 

Photographer: David Paul Morris/Bloomberg
Updated on

As U.S. tax cuts prompt Apple Inc. and other tech companies to bring home their overseas cash hoards, it’s leaving a void in the market for short-term corporate bonds, where those firms had invested much of the money. That’s now making it more expensive for other companies to borrow.

Once the biggest buyers of short-dated corporate debt, Apple along with 20 other cash-rich companies including Microsoft Corp. and Oracle Corp. have turned into sellers. While they once bought $25 billion of debt per quarter, they’re now selling in $50 billion clips, leaving a $300 billion-a-year hole in the market, according to data tracked by Bank of America Corp. strategists.