Apple Inc. (AAPL) – Get Report rose higher Thursday after the world’s most valuable tech firm filed plans to raise billions in the bond market that could be used to boost shareholder returns.
In papers filed with the Securities and Exchange Commission ThursdayApple said it can sell four different notes, ranging in maturities from seven to 40 years, with proceeds intended for “general corporate purposes, including repurchase of our common stock and payment of dividends under our capital return program.” giving to shareholders, financing for working capital, capital expenditures, acquisitions and debt repayment.”
Apple is rated Aa1 by Moody’s Investors Service, its second highest rating, while Standard & Poor’s rates the tech giant at AA+. Only Microsoft MSFT and Johnson & Johnson, both triple-A credits, have a higher rating than Apple.
The streets founder, Jim Cramer, said a successful long-term bond offering, priced at a yield premium on 30-year US Treasuries, would allow Apple to “buy back an insane amount of stock.”
Apple shares were up 0.67% in afternoon trading Thursday, switching hands at $145.95 each.
Apple last year raised $8.5 billion in a four-part bond sale with maturities of 2030 and 2050, with coupons ranging from 0.75% for their three-year paper and just 1.75% for their benchmark 10-year bonds.
Since then, it has tapped into the market three more times — not counting today’s plans — including a $14 billion sale in February.
Cash flow to cover the borrowed money probably won’t be a problem: Apple had revenue of $84.1 billion in June, with a gross margin of 43%, as part of a record report that showed a 50% increase in iPhone sales and a all-time high in service revenues.
Apple said it’s seeing “very strong double-digit year-over-year revenue growth in the September quarter,” but noted it would be slower than the 36% gain recorded for the three months ended June, pushing revenue down. from the tech giant to a street. destruction of $81.4 billion.
Supply constraints, Apple said, would likely hit both the iPhone and iPad in terms of sales, as a shortage of global semiconductors blunts its ability to meet “overwhelming” consumer demand. The hit will reduce just over $3 billion from revenue for the quarter in September, Apple said, slightly higher than the impact it forecast for the prior period.