Apple is preparing to issue bonds in the Asia Pacific region, in order to raise funds for a number of shareholder-related actions, according to a report. It is claimed Apple will be selling bonds in Taiwan and Australia so it can raise between $3 billion and $4 billion in debt, which it can then use to fund dividend payments and share buybacks, all without touching any of its large cash reserves it mostly holds outside of the United States.
According to a source of the Wall Street Journal, its latest round of bonds issued in Taiwan and Australia will be worth approximately $1 billion per market, though this could increase depending on local demand. Taiwan and Australia are not the only potential venues, with Apple apparently also considering issuing more bonds in Japan and Singapore. Apple has already issued foreign bonds a number of times in the last year, including sales in Swiss francs, euros, yen, and other currencies.
The bond sale solves one of the major problems Apple continues to have, namely how best to use its cash reserves. It is said that the total amount it has available was $233 billion as of March, with 90 percent held outside of the United States. If Apple were to bring some of the reserves into the US, the cash would be subject to taxation, something that is currently being avoided. Issuing bonds in other countries allows Apple to fund important things it needs to do in the US, such as buying back shares or paying dividends, while not handing over a considerable sum in tax to the US government.
Since 2012, Apple has paid out approximately $163.1 billion in dividends and share buybacks. While it previously planned to return $200 billion to shareholders by March next year, it currently aims to return $250 billion, by March 2018.
