In the wake of Apple's (AAPL) successful earnings results, the company took advantage of low interest rates to issue $6.5B worth of new debt. We were a bit surprised that the offering would include floating-rate bonds as well as fixed-rate bonds considering that interest rates are already at historical lows. Apple currently has $32.5B outstanding in long-term debt and $3.9B outstanding in short-term commercial paper. Apple also has $178B in cash and liquid assets; however, of it is located in its foreign subsidiaries. We expect that Apple will use the proceeds from its new bond offering to repurchase shares. If the by Senators Barbara Boxer and Rand Paul passes, Apple could repatriate some or all of its overseas cash based on its foreign source earnings and pay a maximum tax of 6.5% versus the maximum statutory federal tax rate of 35%. At any rate,…
