Apple Inc. Levers Up Another $12 Billion

Apple taps the debt markets to bolster its domestic cash coffers yet again.

Apr 29, 2014 at 8:45PM

Apple (NASDAQ:AAPL) confirmed last week during earnings that it would be issuing more debt in the form of floating rate and fixed rate bonds, in order to facilitate its programs to return capital to shareholders. This will be the second year in a row that the company issued such bonds, and much like last year, the timing could work out quite well for the company, with interest rates rising shortly after the offering last year, and potentially being poised to do the same again this year. The total bond issue ended up at $12 billion, which should bring Apple's total long-term debt to approximately $29 billion.

In this segment from Tuesday's Investor Beat, host Erin Kennedy and Motley Fool tech and telecom bureau chief Evan Niu discuss Apple, and why these bonds are necessary. Despite the company's recent declines in domestic capital due to its capital distributions to shareholders, Apple's continued successes internationally have left the company with $132.2 billion held in cash abroad. Returning that cash to the U.S. however would mean a very hefty 35% repatriation tax. Evan discusses why this bond issuance represents a tax-efficient way to repurchase shares, and he also takes a look at how long Apple could continue to issue debt in this way before it represented a financial risk to the company.

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Erin Kennedy owns shares of Apple. Evan Niu, CFA owns shares of Apple. Evan Niu, CFA has the following options: long January 2015 $460 calls on Apple and short January 2015 $480 calls on Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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