Apple Inc. (AAPL) has been creating a buzz in the bond market. Investors have been working on patching up losses from the $17 billion debt sale in the previous year. While losses were mainly due to the tech giant, still, investors chose to line up and be part of the latest offering. Analysts project the new offering may take on comparative size as the previous sale.
"A lot of these institutional buyers need to be a part of these big deals because they need to mimic the indexes and they need to play in the new name," Jody Lurie, a Philadelphia-based corporate credit analyst at Janney Montgomery Scott LLC, told Bloomberg last April 25.
"There's a lot of factors that forced their hands into such a bond offering, and those factors are still there."
The tech giant is looking to offer notes to support the $30 billion raise for its stock buyback plan. This is following the increase in shares to 32 percent based from the last bond issue. According to Bloomberg, Apple may start selling securities to set the rates before the Federal Open Market Committee policy statement on April 30.
Last April 23, the company explained that its 2014 financing may compete with the value offered 12 months ago. The offering a year ago was considered as the largest on record for corporate sale back then.
Thornburg Investment Management Inc. money manager Lon Erickson said that the focus on longer-maturity bonds for Apple may have affected the psychology of buyers despite losses resulting from increasing Treasury yields.
"I'm sure it'll be in the back of investors' minds, and so maybe bankers and Apple, being cognizant of that, will start the talk a little bit wider," Erickson explained. Thornburg Investment Management Inc. managed $90 billion.
"But I wouldn't be surprised if folks just piled in and drove it to the point where there wouldn't be any extra compensation for it."
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