Apple Goes Down Under to Raise $1.04B in Second Australian Bond Issue

Posted by at 12:05 pm on June 3, 2016

Apple-logo-grey-880x625Apple has raised A$1.425 billion (just over $1 billion in US dollars) through the sale of Australian bonds on Friday. This was the second such bond sale Apple has held in Australia, with a sale from last summer raising about $1.642 billion — and setting a record for a non-financial sector bond sale in that country. Apple has taken to using bond sales as a way to raise money for its US-based investments and payouts, such as share buybacks and investor dividends, rather than “repatriating” some of its staggering $200 billion in foreign cash reserves.

The mac maker has said previously that it is cost-prohibitive to bring the money (earned from foreign sales, which make up the bulk of Apple’s revenue) to the US, since the company would pay very high by comparison by being double and high tax rate on the currency. Low interest rates and bond sales make it far “cheaper” for Apple to raise money for US payouts rather than subject its cash reserves — most of which are held outside the US — to as much as a 35 percent tax rate.

Apple, along with other companies, have previously campaigned for a temporary “tax holiday” that would drastically reduce that rate for a limited time, but under Tim Cook the company appears to have shifted positions to advocating for a permanent lowering of the corporate tax rate to around 20-25 percent, a plan President Obama has also proposed — but Congress has so far failed to consider,

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