Apple kicked off its first bond sale in Australia Thursday morning, and topped AU$1.2 billion in the first two hours. It was almost like an iPhone launch, but with Kangaroo bonds instead.
Apple's Australian bond sale, or kangaroo bonds, have already topped expectations
The bond sale is being managed by Commonwealth Bank, Deutsche Bank, and Goldman Sachs. It was dubbed a benchmark-size sale before launching, which means sales were expected to come in between $500 million and $1 billion. Apple quickly surpassed sales expectations.
Four and seven year bonds were offered, according to the Sydney Morning Herald. The four year bonds are expected to earn about 3 percent while the seven year bonds are projected to bring investors 3.9 percent.
This is expected to be among the largest bond sales in the country and is raising some of the money Apple is using to to pay shareholder dividends. Taking on debt costs far less for Apple than bringing revenue from overseas sales into the United States because the tax rate would be substantially higher than the interest on the bonds.
Apple said that along with dividend payments, the bond money will go to share buybacks, capital expenditure, working capital, acquisitions, and debt repayment. The company's debt from bonds so far is sitting at about US$50 billion.