Drudge Retort: The Other Side of the News
Saturday, December 16, 2017

If Apple Inc. were a bond fund, it would dwarf the competition. The iPhone-maker has $148 billion of its record $257 billion cash pile invested in corporate debt alone, according to a company filing from Wednesday. That's enough to buy all the assets in the world's largest fixed-income mutual fund, the Vanguard Total Bond Market Index Fund, which has about $145 billion of assets including company, government and mortgage bonds. Like many technology companies, Apple has resisted transferring the money it earns abroad back to the U.S. to avoid triggering corporate income taxes on the earnings. Instead, the Cupertino, California-based company invests in corporate bonds and other assets like money market funds and U.S. Treasuries.

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With more than 90 percent of its war chest abroad, the company regularly issues bonds of its own to help fund programs like share buybacks and capital spending. Apple said Thursday it's selling what may be $7 billion of debt, and will use proceeds in part to support a 63-cent dividend and an increased stock-repurchase program.

Apple and other cash-rich companies are holding out, hoping that they may soon be able to bring their cash home at a lower tax rate. President Donald Trump's tax plan includes a repatriation provision, though it didn't specify a rate. He proposed a 10 percent levy when campaigning, and Treasury Secretary Steve Mnuchin has said the rate would be "very competitive."

Apple's holdings, managed by its Braeburn Capital Inc. unit in Reno, Nevada, may be large enough to move markets if the company makes any big shifts in its allocations. Apple has typically favored safer, shorter-dated bonds from high-rated financial issuers and other companies.

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I had read about Apple's huge pile of cash sitting overseas, but this was my first read regarding what the company does to put that cash into motion while it resides in overseas accounts. Apparently, Apple equity owners not only own a technology/retail company, but also a debt hedgefund.

#1 | Posted by GOnoles92 at 2017-12-16 12:16 PM | Reply

The tax plan offers a zero percentage tax rate on foreign income after the one time repatriation rate. It is cheaper now to run your business outside of America. Thank you President Trump!

#2 | Posted by BruceBanner at 2017-12-16 04:45 PM | Reply

2 lol how can you even type such rubbish. Apple has floated some of the largest corporate bond deals ever, under Obama.... Because it was cheaper then reclaiming forgein profits or paying dividends.

#3 | Posted by DavetheWave at 2017-12-17 12:10 PM | Reply

More to point, Apple has a couple hundred billion on the sidelines. Of course ultra short bonds earn more then cash.

#4 | Posted by DavetheWave at 2017-12-17 12:12 PM | Reply

2 lol how can you even type such rubbish.

Because that is what he has been told by the MSM, who conveniently leave out that we are the only Group of 8 nation to tax revenue that has already been taxed by the country in which it was generated. This is why companies like Apple leave the money overseas rather than bringing it back to the US to be used here. The repatriation tax is in the new tax bill so that the companies will not be allowed to bring it back for free after flouting the US Tax laws for the past 20 years.

#5 | Posted by Rightocenter at 2017-12-18 05:57 PM | Reply

"The repatriation tax is in the new tax bill so that the companies will not be allowed to bring it back for free after flouting the US Tax laws for the past 20 years."

They'll just be bringing it back for a MUCH, MUCH lower rate...meaning they were brilliant for flouting the US Tax laws, and will now be rewarded handsomely.

#6 | Posted by Danforth at 2017-12-18 06:11 PM | Reply

Some folks believe fining a multinational bank $100 million is a deterrent when they made $3 billion breaking the law.

#7 | Posted by Danforth at 2017-12-18 06:12 PM | Reply

#6-7

They weren't going to bring it back under the prior tax laws (and nothing prevented them from keeping it offshore) so at least we will be getting something. Dan, you know better than anyone else that a smart accountant or tax lawyer will find loopholes in any tax code. The issue here is getting that money back to the US...whether they use it for buybacks, issue a dividend or use it for growth, the point is that it is back here in the US.

#8 | Posted by Rightocenter at 2017-12-18 07:47 PM | Reply

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