Apple announces historic $US17 billion bond issue ahead of massive dividend program

Apple is issuing $17 billion in bonds, making history as the largest ever single non-bank bond deal, ahead of a series of planned dividends that will see $US100 billion returned to shareholders.

According to Reuters, Apple currently holds around $US145 billion in cash through a subsidiary called Braeburn Securities.

As SmartCompany reported in October last year, if Braeburn were a stand-alone hedge fund, it would be the largest in the world, coming in well ahead of the estimated $US100 billion held by Bridgewater Associates.

However, due to Apple’s tax strategies, which see the tech giant pay an effective tax rate of 9.8% and just 1.9% on its non-US earnings, only $US45 billion of its cash is readily available in the US.

The news comes after Apple disappointed investors by posting revenues of $US43.6 billion with a net quarterly profit of $US9.5 billion for the fiscal second quarter of the year.

The result came in revenue of $US39.2 billion and net quarterly profit of $US11.6 billion for the same quarter last year.

In contrast, leading rival Samsung recently posted an operating profit of 8.8 trillion South Korean won, or about $US7.9 billion, while up a massive 54% year-on-year, remained well below Apple’s results despite Samsung’s larger smartphone shipments.