Apple Bond Sale To Reward Shareholders

Apple has sold $17bn (£10.9bn) in the largest non-bank bond deal in history as it moves to placate frustrated shareholders.

The move, to raise money to pass along to investors through dividend payments and stock buy-backs, is part of an effort to reverse a 37% drop in Apple's stock price during the past seven months.

It took advantage of low interest rates through the sale despite having $145bn in cash - more than enough to cover the $100bn cash return programme.

However, most of its money sits in overseas accounts and the company doesn't plan to bring it to the US unless the federal corporate tax rate is lowered.

Raising the money through a corporate bond sale also gave Apple a tax benefit because interest payments on corporate debt are tax-deductible.

The plunge in Apple's stock has been attributed to intensifying concerns about the company's shrinking profit margins as it faces more competition in the mobile computing market.

Last week, Apple confirmed its first drop in quarterly profits for a decade.

Rajeev Sharma at First Investors Management said: "Apple made its intentions clear that this deal is for shareholder-friendly activity, but they have tremendous metrics and brand recognition.

"Apple is something everyone wants in their portfolio," he concluded.

Apple's stock added $12.66, or nearly 3% on Tuesday, to close at $442.78.

The shares have now risen by 9% since Apple announced its plan to return $100bn to stockholders.

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