Apple Returns to Bond Market with Major Issuance Amid Rising Rates

Apple Inc. is set to make a significant return to the corporate bond market with plans to issue investment-grade debt on Monday, marking its first issuance of company bonds in two years. The tech giant is considering releasing bonds in up to four parts, with the longest tranche being a 10-year bond initially priced approximately 0.7 percentage points above U.S. Treasury yields. This move, according to insiders, is aimed at capitalizing on favorable market conditions for industrial and technological firms.

As details about the transaction have not yet been made public, an anonymous source revealed expectations of between $35 billion to $40 billion in new high-grade U.S. corporate bond issuances this week, with Apple potentially dominating a significant portion of this figure. Esteemed financial institutions including Barclays, Bank of America, Goldman Sachs, and JPMorgan Chase are leading the bond issuance effort for Apple.

Apple's previous bond issuance occurred in May 2023, when the company raised $5.25 billion across five parts, notably incorporating a 30-year bond. This latest move comes amid an era of rising borrowing costs, which have seen Apple reduce its debt levels over recent years. As of the end of March, Apple's long-term debt was approximately $92 billion, representing a decrease from nearly $113 billion at the same quarter in 2022.

The forthcoming Apple bonds are expected to receive high ratings, with Moody's likely to assign them the highest grade of Aaa and Standard & Poor's to mark them as AA+, reflecting strong confidence in the tech giant's financial health and ongoing profitability. This issuance underscores Apple's strategic approach to financing and capital management, leveraging favorable conditions to support its broader corporate objectives.