 "Apple plans $12-bn bond sale for buybacks and dividends")
Apple announced plans on Tuesday to sell up to $12 billion in bonds to pay for share buybacks and dividends, as blue-chip companies test investors' appetite for debt after two weeks of turbulent markets.
Investors were also paying attention to Apple on Tuesday as some of Wall Street's top investors - among them Carl C Icahn and David Einhorn - disclosed they had sold some of their stakes in the company's stock over the last three months of 2015.
Apple's debt sale is the second-largest bond offering this year, behind Anheuser-Busch's $45.8 bn bond issue in January, and more than twice as large as AT&T's $5.99 bn offering that month, according to Thomson Reuters. Apple habitually uses the debt markets despite having $215.7 bn in cash on its books, largely because 93 per cent of that cash is abroad and would incur taxes if it were returned home.
Company executives said last month that they planned to be "very active" in the American and international debt markets this year to pay for Apple's capital return plan. Apple has completed $153 billion of its $200 billion buyback and dividend programme.
New investment-grade bond sales were humming along in January until the global markets became anxious about plummeting oil prices and fears of economic weakness. After a $2.9 billion bond by Home Depot issued on February 3, the market for new investment grade corporate bonds all but dried up until Tuesday, Thomson Reuters said. IBM announced a sale of $5 billion in bonds of varying maturities on Tuesday, and Comcast priced its $2.25 billion bond deal.
Apple said in a securities filing on Tuesday that it would use the money for general corporate purposes, which could include acquisitions and debt repayment. Part of the offering is a seven-year green bond raising money to invest in clean technology and other environmentally friendly projects.
In a filing, Icahn disclosed that he sold seven million shares of Apple over the last three months of 2015. Icahn has been a vocal investor, urging Apple to buy back its shares and at one point wooing Timothy D Cook, Apple's chief executive officer, with an invitation to dinner at Icahn's apartment. The investor has a 0.84 per cent stake in the company. David Einhorn, the founder of hedge fund Greenlight Capital and another vocal Apple shareholder, also pared back his position in Apple, nearly halving Greenlight's 11 million stake by selling 4.9 million shares. The firm has a 0.11 per cent stake in the company.
Hedge fund Tiger Global Management, however, took a new position in Apple, scooping up 10.6 million shares.
© 2016 The New York Times News Service
