Apple wows market with record $17 billion bond deal

Tue Apr 30, 2013 5:44pm EDT
 
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By John Balassi and Josie Cox

NEW YORK/LONDON, April 30 (IFR) - Apple Inc wowed the debt markets on Tuesday with the largest non-bank bond deal in history, pricing a whopping $17 billion as the U.S. computer giant switches strategy to placate restless shareholders.

Just a week after announcing its first drop in quarterly earnings in a decade, Apple came to market with the massive deal to raise funds for an ambitious program that will return $100 billion in cash to holders of Apple shares.

Sources said investors could barely submit orders fast enough to get in on the deal from Apple, the only major tech company without a single penny of debt on its books.

The six-part all-dollar offering attracted more than $50 billion of orders by midday in New York - a massive level of demand even in the current red-hot climate of the bond markets.

"Apple made its intentions clear that this deal is for shareholder-friendly activity, but they have tremendous metrics and brand recognition," Rajeev Sharma, portfolio manager at First Investors Management Co, told IFR.

"Apple is something everyone wants in their portfolio."

The $17 billion size easily trumps the previous biggest single deal according to Thomson Reuters/IFR data, a $14.7 billion deal from Abbott Laboratories spin-off AbbVie last November.

Earlier, a source said potential investors had been told on Monday that this would be Apple's only bond deal of the year, apparently scuttling hopes of possible euro or sterling issues - and helping fuel demand for Tuesday's mega-deal, which was led by Deutsche Bank and Goldman Sachs.   Continued...

 
A table of the iPod nano is seen at the Apple Store during Black Friday in San Francisco, California, November 23, 2012. REUTERS/Stephen Lam