Apple finances share buyback with fresh bond money

Apple has regularly issued corporate bonds to raise capital in the past, even though the company itself has substantial cash reserves. Now a new step may be imminent: Apple could sell new bonds today. The goal seems clear: additional liquidity for a $100 billion share buyback program. For investors, analysts, and you, this is a clear sign of Apple's financial strategy.

According to recent media reports, Apple is planning to sell corporate bonds for the first time since 2023. According to information obtained by Bloomberg, citing a person familiar with the matter, the sale is expected to take place today. These are so-called investment-grade bonds, which could be issued in multiple installments. For Apple, this would be a classic capital-raising measure that would also create a financial foundation for its newly announced share buyback program.

Apple wants fresh capital – despite high cash reserves

According to its latest quarterly report, Apple has approximately $28 billion in cash and cash equivalents. Nevertheless, the company is resorting to selling bonds. The reason: Corporate bonds offer a relatively inexpensive way to raise fresh money quickly and on a large scale – without issuing new shares or becoming more dependent on banks. Unlike raising capital through shares, Apple does not dilute the stake of existing shareholders through this step. This makes bonds a particularly attractive financing instrument for a company like Apple.

Details on the planned bond sale

The exact terms of the deal have not yet been made public. What is known, however, is that Apple apparently plans to issue the bonds in up to four installments. The longest portion of this new issue will have a term of ten years and will be offered at an interest rate approximately 0.7 percent above the comparable US Treasury bond. This type of issue is investment-grade bonds – i.e., securities with a high credit rating. Investors consider them a relatively safe investment with a predictable return. While government bonds generally offer even greater security, Apple's creditworthiness brings it close to that. The transaction is expected to be supported by several major banks: Barclays, Bank of America, Goldman Sachs, and JPMorgan Chase & Co. are reportedly responsible for handling the bond sale.

What is the planned issue volume?

Although the exact amount Apple intends to raise has not yet been confirmed, investment bankers estimate a total volume of approximately $35 to $40 billion on the market. A significant portion of this is expected to come from technology companies – and Apple is likely to play a leading role. A bond of this size would not be unusual for a single company like Apple. Apple has raised similar amounts through the capital markets several times in the past.

Purpose of the bonds: $100 billion buyback program

One obvious use for the capital is the new share buyback program Apple announced in its second-quarter 2025 earnings report. The board of directors has authorized up to $100 billion to repurchase its own common stock. Such a buyback typically has a positive effect on the share price, as it reduces the supply of shares on the market while signaling the company's confidence in its financial position.

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Why use bonds instead of simply using existing money?

Despite high cash reserves, Apple has chosen to use the capital markets for its financing. There are several reasons for this. Firstly, Apple can generate liquidity by selling bonds without having to draw on existing reserves. Secondly, the interest rates a company like Apple has to pay are often significantly lower than with traditional bank loans (via Bloomberg).

Another advantage: The bonds are repaid over many years. At the same time, the share price remains stable because no new shares are issued. For investors, this is a sign of a strategically well-thought-out capital structure.

Apple relies on bonds instead of reserves

Apple is apparently planning a new bond sale to secure additional billions – despite already well-filled coffers. The goal is, among other things, to finance the recently approved $100 billion share buyback program. The bonds are to be issued in several installments with maturities of up to ten years, backed by leading US banks. For investors, this means that Apple remains financially flexible and relies on proven methods of raising capital without diluting existing shares. If you are invested in Apple or plan to invest, these are important developments you should keep an eye on. (Image: Shutterstock / SnapASkyline)

Disclaimer: No recommendation for investments

This article does not constitute financial or investment advice. The information contained herein is for journalistic and informational purposes only. Please conduct your own research or consult a financial advisor before making any investment decisions.