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Sources say $1 Billion of 30-Year Bonds to be Issued by Apple in Taiwan

Sources say $1 Billion of 30-Year Bonds to be Issued by Apple in Taiwan
With the aim of raising $1 billion, for the first time Apple Inc plans to issue bonds in Taiwan, say media reports quoting several sources that are familiar with the matter.
Apple is among a number of huge global names who have in recent times sold billions of dollars on the island's busy debt market.
Speaking on condition of anonymity, the sources told Reuters on Wednesday, the U.S. dollar bonds will have a tenor of 30 years. Apple declined to comment when asked about the plan.
With long-term buyers of debt, primarily life insurance firms, seeking creditworthy names and chasing higher yields, there is high liquidity in the Taiwanese bond market. Taiwan which is the home of Apple’s supply chain is also the place where blue-chip multinationals regularly issue dollar bonds of such size.
For example, 30-year bonds with yields of 4.7 percent with a total worth of $915 million were sold by the U.S. chipmaker Intel Corp in the island in December last year. A $1.47 billion bond of the same maturity at 4.915 percent was issued by Global brewer Anheuser Busch InBev SA about a month later, according to Taiwan Over-The-Counter Exchange data.
The OTC exchange data shows that so far this year already more than half of the $29 billion in U.S. dollar bonds sold for all of 2015 and upwards of $16 billion in new U.S. dollar bonds have been issued for the island nation.
It was not aware of any plan by Apple to issue bonds said Taiwan's over-the-counter exchange, where corporate bonds can trade in the secondary market. Most often three days or less is required by the bond issuers to notify the exchange before being listed according to the rules and regulations in Taiwan.
Reuters quoted two sources form the market that initial yields of around 4.2 percent to 4.3 percent on the planned Apple bonds were being look at by the market participants.
The last quotation for the island nation’s 30-year government bond was around 1.6475 percent. This bond is less liquid in the secondary market.
Several media reported sources as saying that market participants that had made enquiries about the potential bonds were told by the company and the intermediaries that the planned Apple bonds will not be redeemable for the first two years after they are issued.

Christopher J. Mitchell

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