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About the Author ValueWalk

ValueWalk was started in January 2010, with a focus on value investing and value investors. As the site has grown, the scope has expanded. ValueWalk is now a news site covering all breaking financial news with an emphasis on value investing, hedge funds, large asset managers, Tech news, and general business news. The site contains archives of famous investors, and many investor resource pages. The site is famous among the value investing community as one of the best sites for evergreen and new content. ValueWalk has gained popularity among all circles for its breaking stories on hedge funds, and investigative reports on investments by major funds.

Today Apple Issued €2.8 Billion Worth Of Bonds


Apple Inc. NASDAQ:AAPL has just issued its very first debut offering in euros. The bonds will mature in eight and 12 years and follow the plan Apple had announced previously. The offering not only raises Apple Inc. NASDAQ:AAPL’s debt but does so at some of the lowest interest rates every offered.

Apple earnings AAPL

Apple’s (AAPL) bonds bring low yields

The Wall Street Journal reports that the bonds bring the lowest yields ever for corporate debt lasting eight and 12 years, enabling Apple to take advantage of the lowest interest rates Europe has ever had. The total offering is €2.8 billion ($3.5 billion).

The eight-year bonds yield an interest rate of 1.082%, while the 12-year bonds bring a yield of 1.671%. Both rates are lower than the rates in some states in the Eurozone, and data from Dealogic indicates that the rates undercut all corporate bonds in euros of those maturity lengths.

 Previously, The Coca-Cola Company NYSE:KO had held the record for the lowest interest rate for debt of similar lengths. In September, the beverage maker sold eight-year bonds in euros with a 1.2% interest rate. The company also previously sold 12-year bonds in the Eurozone at a rate of 1.9%, according to data from Dealogic.

Apple (AAPL) debt is highly rated

Standard & Poor’s rates Apple Inc. NASDAQ:AAPL’s credit as AA1, which is the second highest rating. Alix Stewart of Schroder Investment Management told The Wall Street Journal that Apple’s high quality credit and the yield above government bonds for such a high quality name could be attractive for investors, particularly in the low yield environment.

Borrowing costs in the European Union have declined as the zone’s central bank has held interest rates close to zero and taken a number of steps in an attempt to give the economy a boost. A Markit index indicates that the average yield for euro-denominated bonds for companies that are not in the financial industry is at 1.5%, which is close to a record low. Borrowing costs on the U.S. dollar, however, are much higher at 3.93%.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, blogger ValueWalk has a total average return of 2.3% and a 42% success rate. ValueWalk is ranked #1630 out of 3918 bloggers.

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