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Apple Inc Prepares For Its First Bonds Issue In Australia

AppleApple Inc is known all across the world for developing innovative products that revolutionize the way people communicate and do business. The company which loves to pioneer new innovation is once again ready to launch something new for the first time in Australia but it will not be technology related.

Apple recently announced that it had enlisted the services of three banks to help set up a number of investor calls to make Australian bond managers aware of ‘Apple credit’ as the company plans to debut a number of bonds in the Australian market. The three banks enlisted by Apple include Goldman Sachs, Deutsche Bank and the Commonwealth Bank. Apple has been looking for new opportunities to spread out its multi-billion dollar portfolio and diversify its business interests. The company was encouraged by SABMiller, a global brewer who recently released $700 million in bonds in the Australian market.

Apple which has its treasury team based out of Nevada has carefully studied the Australian market and believes that this is the right time to diversify its massive debt book as there is enormous interest in the Asia Pacific region.

Reports suggest that Apple has accumulated billions of dollars and has shelved a lot of that money offshore. The company has found it difficult to repatriate this large amount of cash due to strict government taxation rules in the United States. The company has tended to adopt a policy where it can borrow significant sums of money in foreign currencies and then uses those funds to re-purchase stock and pay Apple shareholders a dividend.

In a statement, John Manning, head of Asia Pacific credit research for Aberdeen Asset Management said

It’s terrific that global champions are recognizing that they get funding diversification in the Australian bond market. Apple should offer good diversification for local investors but I am sure there will be interest through the Asia Pacific region.

Apple has already raised funds in a number of foreign currencies including Swiss francs, Japanese yen and Euros. The company has also invested a part of its cash reserves into Australian dollars and is one of the biggest purchasers of Australian bank commercial paper that is sold in the United States.

Apple’s CEO Tim Cook has faced pressure in the past from a number of corners, most notably from billionaire and investor Carl Icahn who wanted the company to give back a lot more of Apple’s stash of cash to its shareholders.