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| Apple taps markets for record $17bn funding | Apple taps markets for record $17bn funding |
| (35 minutes later) | |
| Computer giant Apple is asking investors for $17bn (£10.9bn) to help fund extra payouts to shareholders in the biggest ever bond issue by a non-banking company. | Computer giant Apple is asking investors for $17bn (£10.9bn) to help fund extra payouts to shareholders in the biggest ever bond issue by a non-banking company. |
| Bond issues - essentially interest-paying IOUs - have been far larger, but only from governments or banks. | Bond issues - essentially interest-paying IOUs - have been far larger, but only from governments or banks. |
| Despite the size of the loan being sought, Apple is unlikely to have problems finding investors willing to advance the money. | |
| The bonds are being sold in New York. | The bonds are being sold in New York. |
| By midday New York time, Reuters were reporting the company had received orders for $50bn, about three times the amount being offered. | By midday New York time, Reuters were reporting the company had received orders for $50bn, about three times the amount being offered. |
| Payback | Payback |
| The money will be used to fund special payments to shareholders who, after years of seeing their shares rise in value, have become frustrated in recent months. | The money will be used to fund special payments to shareholders who, after years of seeing their shares rise in value, have become frustrated in recent months. |
| Apple shares had lost 45% since last September, as rivals such as Samsung have eaten into the smartphone market it used to dominate and its iPad has faced similar challenges. | Apple shares had lost 45% since last September, as rivals such as Samsung have eaten into the smartphone market it used to dominate and its iPad has faced similar challenges. |
| Shares rebounded over the past week or so as the company made moves to pass some of its giant cash pile back to investors. | Shares rebounded over the past week or so as the company made moves to pass some of its giant cash pile back to investors. |
| Although this month Apple reported its first quarterly drop in profits in a decade, it said it would raise dividends for shareholders. | Although this month Apple reported its first quarterly drop in profits in a decade, it said it would raise dividends for shareholders. |
| It made a net profit of $9.5bn in the January to March quarter, down from $11.6bn last year. | It made a net profit of $9.5bn in the January to March quarter, down from $11.6bn last year. |
| But the results were better than many had expected, as strong iPhone and iPad sales boosted revenues to $43.6bn. | But the results were better than many had expected, as strong iPhone and iPad sales boosted revenues to $43.6bn. |
| This is an unusual exercise as Apple is borrowing lots of money when - rare for a technology company - it has $145bn in cash sitting in the bank. | |
| Most of that money, though, is sitting in accounts outside the United States and will be liable for US taxes once it is repatriated. | |
| That makes it cheaper for Apple to raise the money through a bond issue - its first - even though that will attract interest payments. | That makes it cheaper for Apple to raise the money through a bond issue - its first - even though that will attract interest payments. |
| The company has also said it plans to buy back $60bn in shares, and raise its dividend to shareholders by 15%. | The company has also said it plans to buy back $60bn in shares, and raise its dividend to shareholders by 15%. |