Apple launches first Kangaroo bonds, raised $1.2b in two hours

APPLE has launched its first Australian dollar corporate bond issue, raising $1.2 billion within two hours as investors jump on the ‘ultra-safe’ investment.

Apple’s launch of its first Australian dollar bond issue raised $1.2 billion in two hours. Picture: AP

APPLE has launched its first Australian dollar corporate bond issue, raising $1.2 billion within two hours this morning.

Strong demand for the US tech giant’s fixed and floating, four and seven year Kangaroo bonds saw the tech giant quickly outstrip predictions it would raise between $500 million and $1 billion.

Apple bonds are popular because the AA+ rated company is considered an ultra-safe investment, although yields are correspondingly low — about 3 per cent on four-year bonds and about 3.8 per cent on seven-year bonds.

The Australian Financial Review reports that fixed-income investors were notified this morning of the bond sale, with proceeds to be used for “general corporate purposes”.

The company has used the proceeds previously to pay investors dividends and increase its share buybacks.

Apple has plenty of cash on hand — more than US$200 million — but the vast majority is parked in overseas jurisdictions because of the higher corporate tax rate applied in the United States.

In the past two years, Apple has raised $US50 billion in debt, with this latest bond issue set to diversify its funding.

The Company posted quarterly revenue of $49.6 billion and quarterly net profit of $10.7 billion for the quarter that ended June 27

CommBank, Deutsche and Goldman Sachs are managing the Australian dollar bond issue.

Read more at the AFR.