Apple Inc. Plans $12 Billion Bond Offering (AAPL)

The Cupertino-based consumer electronics juggernaut, Apple Inc. (AAPL), announced on Tuesday that it would be marketing a $12 billion bond sale in an effort to keep its overseas cash pile sheltered from the tax man at home.

According to Bloomberg, the company plans to offer a variety of debt notes to prospective bond investors, including: floating and fixed-rate notes with maturities of three and five years, as well as fixed-rate notes with maturities of seven, 10, and 30 years. This massive bond offering comes at a time when many have been scrutinizing Apple for its mind-boggling cash pile overseas, totaling over $132 billion. According to sources, Deutsche Bank (DB) and Goldman Sachs (GS) will be leading the leading the bond offering and a person familiar with the matter also noted that part of the proceeds would be used for distribution payments in light of Apple’s recent dividend increase announcement.

Given that borrowing costs in the bond market are much lower than the taxes that would be levied on Apple if it were to bring home some of its cash from overseas, the debt offering seems like a “no-brainer” for the company; Apple’s chief financial officer, Luca Maestri, elaborated, "To repatriate our foreign cash under current U.S. tax law, we would incur significant tax consequences and we don't believe this would be in the best interest of our shareholders," [see What Can You Buy With Apple's Cash?].

AAPL shares were down $1.76, or 0.30%, as the closing bell rang on Tuesday.

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As of market close on April 29, 2014

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