Apple raises $14 billion after its record quarter. The company has just announced that it has acquired $14 billion worth of bonds. A move that raises questions after posting record financial results last quarter. The company has detailed that it has several plans for this money.
In the current situation, taking on debt is relatively cheap. Apple has decided to plunge into debt again and for the third time since May last year. As reported in Bloomberg, Apple has issued $14 billion in debt divided into six parts. The largest is issued for 40 years.
Apple set out some time ago to achieve what it called “net-quasi neutral”, that is, to reduce the huge amount of money accumulated and that it does not really need. This is all the money that is “leftover” when we take out debt to pay, business acquisitions, and operating expenses. Money that they have decided to return to shareholders in large part.
If the company has excess cash on hand, it may seem odd that it would decide to go into debt to have more cash. There are several reasons for doing this, such as lower taxes in the US. The result can be positive for a company like Apple, which is in very good financial health.
Apple has told Bloomberg that it will use the funds “for general corporate purposes, including share repurchases and dividend payments.” It also has in mind to use it to invest in working capital, capital expenditures, acquisitions, and debt repayments. We should keep in mind that in 2018 and 2019 alone Apple repurchased $130 billion worth of shares.
