Apple entered the US high-grade bond market on Monday with a $5.5 billion four-part offering.
As opposed to original pricing talks in the 150 basis point area, the longest tranche of the offering, 40-year security, now yields 118 basis points over US Treasuries.
In accordance with a source with knowledge of the demand, the order book for the auction peaked at more than $23 billion.
The proceeds from the bond sale will be used for general business reasons, such as financing share buybacks and dividends, according to the sources, who requested not to be identified since the specifics are secret.
The sale comes after the primary market for US investment-grade bonds reopened in the second part of July, propelled by a credit market rise.
Many of the the top banks sold substantial amounts of debt after reporting results, allowing supply to exceed estimates for the month.
The upward trend is projected to continue this week, with Wall Street syndicate desks anticipating approximately $30 billion in additional high-grade bond issuance.
Apple, one of eight businesses that issued new high-grade bonds on Monday, looks to be capitalizing on the corporate market’s recent stability and lower borrowing costs.
The yield on Bloomberg’s benchmark investment-grade index hit a nearly two-month low on Friday.
The iPhone manufacturer has about $180 billion in cash and cash equivalents on hand, and it has paid out around $14 billion in dividends over the previous three years. lower finance costs in the business market
“Apple consistently borrowing tens of billions of dollars annually is due more to its confidence in expanding cash flow than operational needs,” Bloomberg Intelligence analyst Robert Schiffman wrote Monday.
Goldman Sachs Group Inc., JPMorgan Chase & Co. and Bank of America Corp. managed the sale.
Moody’s Investors Service increased Apple’s long-term credit rating to AAA in December, joining Microsoft Corp. and Johnson & Johnson as the only US businesses in the S&P 500 with the highest possible credit rating.