Apple Inc. The U.S. tapped the U.S. blue-chip bond market on Monday as a flood of borrowers raised cash ahead of key inflation readings later this week.
The Cupertino, California-based company sold the bonds in a five-part $5.25 billion deal that originally targeted about $5 billion, according to a person familiar with the matter. The longest portion, the 30-year bond, will yield 108 basis points over comparable Treasuries, down from about 135 basis points initially discussed, said the person, who asked not to be identified because the discussions are private.
Dealers surveyed by Bloomberg expect to sell $30 billion to $35 billion of US high-grade bonds this week as corporate debt markets show signs of stabilising. A total of 11 companies are set to issue $22.55 billion in fresh debt on Monday, locking in 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 & Company Inc. also brought in $3.5 billion and $6 billion in bonds, respectively.
The proceeds from the sale of Apple will be used for general corporate purposes. The person said this could include stock repurchases, dividend payments, working capital, capital expenditures, acquisitions and debt repayments. The sale was the first for Apple since it set aside $5.5 billion in August for buybacks and dividends.
Apple’s decision to issue billions in new debt “is due more to its belief in expanding cash flow than to operational needs,” Robert Shiffman, senior credit analyst at Bloomberg Intelligence, wrote in a note. Net-cash-neutral goal, he said.
“This deal is going to be received very well by the market,” Rob Waldner, Invesco’s chief fixed income strategist and head of macro research, said on Bloomberg TV ahead of the deal’s price. “We have seen great demand for high. 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 Meta Platforms Inc raised $8.5 billion in its second bond sale last week.
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