Apple Goes Ahead With Swiss Franc Bond Sale 

Deal Will Be Apple’s Second Bond Sale Outside of the U.S.

Apple Inc. was poised to complete a Swiss-franc bond sale on Tuesday, taking advantage of the country’s record-low borrowing costs.

The company was seeking to raise at least 1 billion francs ($1.08 billion) from the two-part bond sale, according to one of the banks running the deal.

Bankers say a bond due to mature in November 2024 was to price at an implied yield of roughly 0.25%, while a 15-year bond would price at an implied yield of around 0.7%.

Given that Apple is a well-known brand, investors will likely lap up the deal, said Michal Novak, a fund manager at Swiss & Global Asset Management. Mr. Novak said he has put in an order for some of Apple’s bonds.

Only Swiss health-care company Novartis AG and utility company Swissgrid AG have sold debt of similar maturities at lower yields. Last week, Novartis issued a bond maturing in May 2025 at a yield of 0.19%, according to Dealogic. It also sold a bond maturing in November 2029 at a yield of 0.59%. Swissgrid also sold 15-year bonds at the end of last month at a yield of 0.54%, Dealogic data show.

Apple’s deal comes as soaring demand for Swiss franc-denominated debt has pushed yields on Switzerland’s government bonds below 0% on maturities all the way out to 11 years, according to Tradeweb. Because corporate bonds are typically linked to the price of government debt, that is allowing Apple to snag cheap borrowing costs as well.

The drop in yields followed the Swiss National Bank ’s surprise move last month to remove its long-standing cap on the strength of the franc against the euro and cut its deposit rate deeper into negative territory, boosting the appeal of comparatively higher-yielding corporate debt.

Apple’s Swiss-franc deal is its second bond sale outside of the U.S., after the company raised debt in euros in a two-part sale last year. It also follows a $6.5 billion dollar deal sold last week.

Apple has typically used proceeds from debt sales to help fund dividend payments and share buybacks instead of using cash from overseas earnings that would be taxed if brought back to the U.S. The latest round of bond sales might suggest Apple is planning to increase shareholder returns this year more than in previous years and is spreading out its debt issuance to avoid flooding the market, according to analysts at research provider CreditSights.

Apple is rated Aa1 by Moody’s Investors Service , the second highest possible credit rating.

Goldman Sachs Group Inc. and Credit Suisse Group AG were the banks managing Tuesday’s bond sale.

Source: WSJ – Apple Goes Ahead With Swiss Franc Bond Sale

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