No 'Debt' About It! Apple's (AAPL) Bond Offering Favorable for Taxes

May 3, 2013 12:06 PM EDT
Apple's (Nasdaq: AAPL) $17 billion debt offering earlier this week will benefit investors in more than one way. Primarily, it will be for Apple to return more value to holders via buybacks and dividends, something many have been clamoring for over the past half-year or more.

Moody's has another enticing figure out today as well: $9.2 billion. That's how much Apple will avoid in taxes by using debt versus repatriating offshore funds in its $55 billion buyback plan.

Apple will pay about $308 million per year on the $17 billion bond offering, Moody's noted. That compares to a potential 35 percent tax on funds brought back into the U.S.

Interest payments are also tax deductible, which is another $100 million per year for Apple.

Apple paid about $6 billion in federal income tax last year, equal to about 1 in every 40 dollars collected in corporate taxes by the U.S. last year.

Shares are up 1.2 percent today, with Apple having closed higher seven of the last nine sessions exclusive of today.


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