How Apple Plans to Return $300 Billion to Shareholders

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In an effort to further fund its capital return program, among other things, Apple Inc. (NASDAQ: AAPL) has announced that it is issuing a debt offering. The world’s largest public company has a four-tiered offering of notes due anywhere from 2019 all the way out until 2047.

According to the SEC filing, Goldman Sachs, Merrill Lynch, Deutsche Bank, JPMorgan and Morgan Stanley are acting as the joint book-running managers for the transaction.

The entire offering is valued up to approximately $5 billion. It’s comprised of three $1 billion note offerings that will mature in 2019, 2022 and 2047, as well as a $2 billion note due to mature in 2027.

In terms of the yield, Apple is offering $1 billion in 1.5% notes due in 2019, $1 billion in 2.1% notes due in 2022, $2 billion in 2.9% notes due in 2027 and $1 billion in 3.75% notes due in 2047.

The iPhone giant is set to pay interest on a semiannual basis on March 12 and September 12 of each year, beginning in 2018.

Net proceeds from this offering will go toward Apple’s ongoing capital return program expected to return $300 billion to shareholders by 2019. This cash also will go toward outstanding debt, acquisitions and other operational expenses.

According to Apple Insider:

Apple has turned to favorable debt markets instead of repatriating its gigantic offshore cash hoard to help finance its $300 billion capital return program, which by some estimates is nearly three-quarters complete. The company holds $261.5 billion in overseas cash, a figure that would be subject to America’s high tax rate if repatriated.

Shares of Apple were last seen at $161.89, with a consensus analyst price target of $171.41 and a 52-week range of $102.53 to $164.94.

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