Apple plans $5bn bond sale to safeguard cash reserves

Apple is planning to sell $5bn of bonds in the iPhone maker’s fourth multi-billion dollar debt offering in the past two years as it preserves its overseas cash hoard, according a person with knowledge of the matter.

The company will sell the securities in as many as five parts, with the longest portion maturing in 30 years, said the person, who asked not to be identified because of a lack of authorisation to speak publicly.

The deal may price as early as today. Proceeds will be used for stock repurchases, dividend payments, and debt repayments, among other things, the anonymous source said.

Deutsche Bank AG and Goldman Sachs Group Inc. are managing the debt sale, the anonymous source said.

Cupertino, California-based Apple has issued the equivalent of $32.5bn of bonds since April 2013, when it sold $17bn in what at the time was the biggest corporate-bond offering ever.

The company’s last debt deal was a sale of €2.8bn ($3.17bn) in November that allowed it to fund shareholder rewards without using cash from abroad that would be subject to US repatriation taxes.

“The company is building on the momentum of a strong past couple of weeks,” Jody Lurie, a corporate credit analyst at Janney Montgomery Scott LLC in Philadelphia, which manages $61bn in assets, said in a telephone interview.

The borrowing comes after Apple posted a 30% jump in fiscal first quarter revenue to $74.6bn on January 27, its largest sales increase in three years. Net income rose 38% to a record $18bn.

* Bloomberg