Apple Inc raised A$2.25 billion (US$1.6 billion) with a debut Australian debt sale that is the largest bond deal ever Down Under by a non-financial company.
The iPhone maker sold A$1.15 billion of seven-year notes at a yield of 110 basis points more than swap rates and A$1.1 billion of four-year securities at a spread of 65 basis points.
Apple, which until November last year had only sold US currency bonds, has since expanded its debt issuance to euros, yen, pounds and Swiss francs as well as Australian dollars. It follows a A$700 million inaugural offering last month from brewer SABMiller PLC and joins other overseas-based issuers such as Total SA and Toronto-Dominion Bank in making Australian debuts over the past 12 months.
“It certainly looks like a successful deal, especially if you consider the prevailing sentiment at this moment, it’s not been the most positive of days to issue,” said John Sorrell, head of credit at Nikko Asset Management Ltd in Australia.
Investors around the world sold riskier assets yesterday, as a gauge of Chinese manufacturing plunged to the lowest level since 2009. The recent selloff in corporate bonds has pushed average credit spreads globally to the widest level since 2012, based on Bank of America Merrill Lynch indices.
The Apple deal eclipses the A$1 billion transaction from BHP Billiton Ltd in March that had been this year’s largest non-financial company bond sale, according to data compiled by Bloomberg.
The proceeds of Apple’s Kangaroo bond sale may be used to return capital to shareholders through stock buybacks and dividends, sale managers said in an earlier statement announcing plans to do an Aussie transaction. The Cupertino, California-based company announced in April it was boosting its capital-return program by US$70 billion through March 2017 and would be accessing both US and international debt markets to help pay for it.
All of the longer maturity notes from Apple will be fixed-rate securities, while at the shorter tenor they are set to issue a fixed-rate portion of A$400 million and a floating-rate tranche of A$700 million. Initial price guidance on the four-year debt was for a spread of about 70 basis points, while the price talk on the seven-year notes was a gap of about 115 basis points.
“It must have had a very wide range of acceptance,” Sorrell said, citing Apple’s position as a well-known brand and its strong credit rating as factors that would have helped attract international and domestic investors.
Apple carries the second-highest credit ratings at both Standard & Poor’s and Moody’s Investors Service. The final order book for the transaction was about A$3 billion, a person familiar with the matter said.
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has appointed Rose Castanares, executive vice president of TSMC Arizona, as president of the subsidiary, which is responsible for carrying out massive investments by the Taiwanese tech giant in the US state, the company said in a statement yesterday. Castanares will succeed Brian Harrison as president of the Arizona subsidiary on Oct. 1 after the incumbent president steps down from the position with a transfer to the Arizona CEO office to serve as an advisor to TSMC Arizona’s chairman, the statement said. According to TSMC, Harrison is scheduled to retire on Dec. 31. Castanares joined TSMC in
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the