Thursday, May 2, 2013

How Apple Saved Billions By Issuing $17 Billion in Bonds

Recently, Apple made headlines by issuing a massive amount ($17 billion worth) of corporate bonds.  The main reason was to acquire sufficient funds to pay shareholders rather than having to bring back cash from Apple's overseas operations.  While Apple has around $45 billion in holdings in the U.S., it has $100 billion parked overseas.  Because it can be very expensive to repatriate these foreign funds, major corporations contort themselves to devise strategies to avoid paying this repatriation tax.

Below is a brief video highlighting the details of this strategy: