Apple issues $5.25 billion of bonds: larger than expected but with lower interest rates, with a maturity of up to 30 years

Many issuers raised money ahead of key inflation data later this week, and Apple entered the U. S. blue-raised debt market on Monday.

Apple issued a total of $5.25 billion of bonds in five tranches, with an initial target of about $5 billion, according to a person familiar with the matter. The longest maturity is 30 years, and the yield will be 108 basis points higher than comparable US Treasuries, less than the initial discussion of about 135 basis points. People familiar with the matter spoke on condition of anonymity because they talked about undisclosed information.

A total of 11 companies will issue a total of $22.55 billion in new bonds on Monday to lock in financing ahead of Wednesday's consumer price index and Thursday's producer price index. T-Mobile and Merck have raised $3.5 billion and $6 billion, respectively.

The proceeds from Apple's offering will be used for general corporate purposes, possibly including share buybacks, dividends, working capital, capital expenditures, acquisitions and debt repayments, according to people familiar with the matter.

It was Apple's first offering since raising $5.5 billion in debt last August, when the money was used for share buybacks and dividends.

Robert Schiffman, a senior credit analyst at industry research, said Apple's decision to issue billions of dollars of new debt showed more confidence in expanding cash flow than operational needs. The issuance of the five bonds should further benefit the company's net cash-neutral goal, he said.

A representative of Apple did not respond to a request for comment. T-Mobile and Merck didn't immediately respond to requests for comment.