Apple Bond Sale Rasies £10.9bn

Apple has raised $17 billion (£10.9bn) through a bond sale as part of plans to return some of its estimated cash reserves of $145 billion to shareholders.

The company made the pledge in its quarterly results last month, despite reporting its first drop in profits in ten years. However, the results were better than expected with sales rising by 11 percent to $43.6 billion (£28.6bn) thanks to strong demand for iPhones and iPads.

Most of Apple’s cash reserves sit in accounts located outside the US and would be subject to taxes and interest if they returned to the country. A bond sale is therefore more attractive as interest rates in the US have never been lower, making it cheaper for companies to raise funds.

Apple bond sale

The bond sale is Apple’s first in nearly two decades and is the largest ever by a non-banking company. The sale apparently generated huge interest among investors, with some reports claiming Apple received orders for nearly $50 billion, almost three times the amount being offered.

Shareholders have grown increasingly restless as concerns about the company’s future product plans and increased competition in the smartphone and tablet markets from the likes of Samsung resulted in an almost 40 percent decline in Apple’s share price since it reached a record high last September.

Apple investor and hedge fund manager David Einhorn had led a shareholder lawsuit against the company in the hope of releasing some of the company’s cash reserves, but later withdrew the action after his Greenlight Capital firm secured an injunction that prevented Apple from holding a shareholder vote on the issue of preferential shares.

Apple CEO Tim Cook had branded the lawsuit a “silly distraction”, but stressed he understood investors’ concerns and was working on a way to return more money to them.

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