Apple Raises $17 Billion in Largest Corporate Bond Sale Ever
Apple sold $17 billion worth of bonds late Tuesday in the largest sale of corporate bonds ever, part of a plan to increase its share buyback program and boost its dividend.
Apple sold $17 billion worth of bonds late Tuesday in the largest sale of corporate bonds ever, part of a plan to increase its share buyback program and boost its dividend.
Interest rates have to start rising again soon, and while higher rates are generally good for people looking to put new money to work in the bond market, those who already own bonds could take a bath on their supposedly "safe" investments.
Thanks to record-low interest rates, consumers with good credit can get 30-year fixed-rate mortgages for about 3.75%. But that's sky high compared to the 0.75% interest IBM is going to pay $900 million worth of corporate bonds.
Investors hungry for higher yields are flocking to the credit markets, putting junk-bond issuance on a record-setting pace. And lenders are loosening credit standards, while companies take on debt just because it's cheap. Sounds like a familiar scenario.
Fears of an economic slowdown have sent stocks reeling and bonds soaring. With companies sitting on record piles of cash and easy credit available, this may lay the foundation for a potential mergers and acquisitions boom -- and help revive equities.
Hedge funds are doubling down on inflation by buying gold. Institutions are buying corporate bonds -- a wager on deflation. Should you follow them? And if so, which way?
Massive amounts of corporate debt issued from 2003 to 2007 is set to come due over the next four years. The inability of companies to refinance their debt will leave them paying high interest payments, dragging down corporate earnings and forcing some companies into bankruptcy.







