What you need to know
- Apple is issuing its cheapest bonds in years.
- That's because it's taking advantage of Federal Reserve emergency measures.
- Several companies have already taken advantage of the measures.
Apple is issuing the cheapest bonds it has in years thanks to emergency measures enacted by the Federal Reserve.
As Reuters reports:
Apple Inc (AAPL.O) on Monday capitalized on the Federal Reserve's emergency measures in response to the coronavirus outbreak to issue its cheapest bonds in years, making it the latest blue-chip company to do so to fund stock buybacks and dividends. Apple's offering illustrates how companies with the best credit ratings are boosting shareholder returns by tapping cheap debt made available through the Fed's backstopping of the credit markets. Apple shares are virtually flat year-to-date, compared with a 12% drop in the S&P 500 Index
Apple raised $8.5 billion by selling four different bonds, ranging from three year's maturity to 30. As Reuters notes, its three and five-year bonds had "the lowest rates the company has paid on bonds with such durations since 2013."
The money will be used for "general corporate purpose" such as share repurchasing and dividend payments. According to the report, Federal Reserve interest rates were "slashed" in March to help struggling companies during the global pandemic, and the move has fuelled record uptake from companies including Boeing and Ford.
Larger companies such as Apple have also been able to take advantage:
The policy has also allowed financially strong companies such as Apple, which had just over $40 billion in cash as of the end of March, to reduce its cost of capital to the benefit of shareholders.
Last week, Apple reported Q2 earnings of $58.3 billion and recorded 1% growth over the previous year.
A Reddit hack has plastered popular subreddits with pro-Trump messages
Reddit is investigating a series of vandalized communities which have been plastered with pro-Trump messages. Compromised moderators may be the source of the attacks.
Go beyond the Wall in Apple Arcade's Game of Thrones: Tale of Crows
"Game of Thrones" fans can now explore the lands beyond the Wall on their iPhone, iPad, Mac, and Apple TV.
Review: The Porsche Taycan can stream Apple Music, no phone or data needed
The 2020 Porsche Taycan is a sweet ride, but it's also the first to fully integrate Apple Music into its own infotainment system — without your phone or data.
Apple-themed Pride shirts you'll love to wear
Apple's iconic rainbow logo has often been associated with the LGBT+ movement. Show your support by wearing an Apple-themed Pride t-shirt, including the one we like the best.