Apple confirms $7.5 billion bond sale after strong investor demand

After yesterday’s report that Apple was preparing to raise about $7 billion through a bond offering, the company has now finalized the terms with the SEC, confirming a slightly larger amount. Here are the details.

Apple expects $7.47 billion in net proceeds from the bond sale

Yesterday morning, Apple filed a preliminary prospectus with the SEC, outlining plans to issue a series of bonds maturing between 2028 and 2036.

Soon after, Bloomberg reported that the sale of bonds totaled approximately $7 billion, with investors already exceeding $30 billion.

Now, Apple has filed the final price list for the bond sale with the SEC, confirming an offer of $7.5 billion over the seven previously announced series, with the following breakdown:

• $500 million in floating rate bonds maturing in 2028
• $750 million in floating rate bonds maturing in 2029
• $1 billion in fixed rate bonds maturing in 2028 with a 4.65% annual interest rate
• $1 billion in fixed rate bonds maturing in 2029 with a 4.75% annual interest rate
• $1 billion in fixed rate bonds maturing in 2031 with a 4.90% annual interest rate
• $1.25 billion in fixed-rate bonds maturing in 2033 with a 5.10% annual interest rate
• $2 billion in fixed-rate bonds maturing in 2036 with a 5.35% annual interest rate

Floating-rate bonds, as the name suggests, have interest rates that fluctuate over time based on certain market conditions, rather than remaining fixed.

Of that $7.5 billion, Apple expects to receive about $7.47 billion after deducting underwriting discounts and other offering costs.

Essentially, Apple will pay investors interest over the life of the bonds, and then repay the entire amount borrowed when each series reaches maturity. Apple may also choose to repay some or all of its fixed-rate bonds early.

As described in yesterday’s prospectus, the company intends to use the proceeds for “general corporate purposes,” which include share buybacks, dividends, acquisitions and debt repayments.

You can read the full filing with the SEC here.

Will review on Amazon