Apple Inc. is considering its first bond sale in euros at a time when the U.S.-based company is trying to finance another round of shareholder rewards.
According to a person with knowledge of the situation, the iPhone manufacturer had a meeting with its investors on Monday, where bond issuance was discussed. The person also reported that a euro-denominated transaction is expected as early as Tuesday.
Two banks – Deutsche Bank AG and Goldman Sachs Group Inc. – were hired by Apple in order to manage the sale. According to investors at two firms, who have been approached, the banks have started to make an assessment of investors interest in the bond offering.
The Chief Investment Officer at BMO Private Bank – Jack Ablin said in a statement, cited by the Financial Times: “If I was Apple, I would try to sell as many bonds, with as long maturities as possible, at the lowest cost possible. Rates will get higher in the US and the dollar is likely to keep getting stronger, so if you need to raise billions of dollars, it would be best to do it sooner rather than later.”
In April 2014 some analysts at research firm CreditSights shared that the US tech giant may issue as much as $5 billion in non-dollar bonds this year after Apple revealed its plans for bonds sale both in the international and domestic markets during the current year.
The bond issuing in euros is considered to be beneficial for the company, which would be able to take advantage of an overseas market that is offering the lowest yields in six years relative to dollar-denominated debt. Apple has been reported to have raised a total of $29 billion from bond sales since 2013.
A spokesman of the company refused to make any comments on the situation and whether the securities would be denominated in euros.
Apple Inc. edged up 1.30% to close at $109.40 per share yesterday, marking a one-year change of +45.38%. The company is valued at $633.40 billion. Shares stood at €87.500 in Frankfurt at 8:08 GMT on Tuesday, down 0.28% on the day. According to CNN Money, the 44 analysts offering 12-month price forecasts for Apple Inc. have a median target of $115.00, with a high estimate of $143.00 and a low estimate of $60.00. The median estimate represents a +5.12% increase from the last price of $109.40.
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