No. of Recommendations: 3
You’ve gotta love Wall Street. They can spot suckers a mile away and create a structured product to sell to them, meanwhile getting their own fees and profits upfront. Apple (which couldn’t get a triple-AAA rating from either agency) is dumping $17 billion of paper on the market, hoping someone is dumb enough to buy it.

Apple’s yields are also expected to beat those offered by some rival companies. Microsoft, which has a slightly higher rating than Apple, last week issued 10-year bonds that yielded 0.7 percentage points above 10-year Treasuries, says Matt Duch, a taxable fixed income portfolio manager at Calvert Investments, who plans to cut back on his Treasury holdings to get a piece of Apple.

For retail investors, getting a hold of Apple bonds also won’t be easy. It’s not entirely clear how many Apple bonds will be available to small investors. Wall Street banks like Goldman Sachs Group and Deutsche Bank AG who are overseeing Apple’s bond sale typically focus on institutional investors that can buy large blocks of bonds. Only later do these big players usually pass along smaller lots to Main Street investors.
http://www.marketwatch.com/story/should-you-buy-apple-bonds-...

When markets crash --and they will soon enough-- then will be the time to go shopping for those bonds.

Charlie
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No. of Recommendations: 3
Charlie,

As usual You are spot on that there will be a time to shop these bonds. We know the sharks swimming in the tank are going to eat. The annoyance, to me, is that Apple has a pile of cash on its balance sheet but tons of it are over seas. Because of government incompetence its cheaper for Apple to pay the fees to these banks and pay coupons then to use their own cash.

Insane.

jack
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No. of Recommendations: 5
Apple’s bonds came onto the secondary market faster than the commentators expected, and they are already trading at slight premiums.
 
Issue Mdy Cpn Due Price Min OfferYLD Adj_YTM
Apple Inc Aa1 0.45 05/03/16 100.136 15 0.4% -4.6%
Apple Inc Aa1 1.00 05/03/18 100.130 2 0.9% -4.2%
Apple Inc Aa1 2.40 05/03/23 100.302 2 2.3% -3.1%
Apple Inc Aa1 3.85 05/04/43 101.065 2 3.8% -2.1%

In the table above, the ‘offer’ is the price for a single bond bought through E*Trade as part of a 10-lot. But the ‘Offer Yield’ is based on buying just the minimum required. The ‘Adj YTM’ is my own calculation, and it is based on a 5% inflation, a 25% ordinary income tax-rate, and a 15% cap-gains tax rate.

Obviously, to buy those bonds at their current prices is to choose to lose one’s purchasing-power. That’s a choice that very rich investors are willing to make. But it’s not a choice I’d advise. Wait ‘em out. Those bonds will become cheaper soon enough, as will plenty of others, and then will be the time to go shopping.

Charlie
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No. of Recommendations: 0
Jack,

I totally agree. Although it looks as if Apple is acting in the best interests of its shareholders, share buybacks are an all too frequently resorted to scam to goose a stock price, but add nothing to the soundness of the underlying business. Apple isn't the only company doing this, nor maybe even the most egregious one. The Fed and their monetary polices and interventions are distorting the economy beyond the possibility of it ever recovering in even our grand children's lifetimes. Yeah, right now, "investors" are becoming as rich as Croesus, but at the cost of destroying the source of genuine capital formation. This is not going to end well for anyone.

Charlie
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No. of Recommendations: 1
hoping someone is dumb enough to buy it.

Must be lots of dumb people out there ... apparently it was oversubscribed by about 3X. When was the last time that happened for a corporate bond offering?
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No. of Recommendations: 0
This is T&S for their 3.85's of '43 as of ten minutes ago. Small lots are paying the higher prices, suffering the lower yields, almost one-quarter of a percent. The AdjYTM is a quick and dirty calc that assumes 5% inflation and a 25% ord-inc tax-rate.

It's often said that State-run lottries are a tax on those who don't understand math. The same might be said about those who buy bonds that don't offer a real rate of return after taxes and inflation, except that it wouldn't be true. Buying bonds that lose you your purchasing-power is merely a sign of your affluence and Conspicuous Consumption that says, "I'm so rich that I can afford to lose money."

(Must be nice to be one of them. ROTFL)

Charlie
--------------



Type Qty Price YTM AdjYTM
Buy 5 103.740 3.64% -0.62%
Buy 20 103.606 3.65% -0.61%
Buy 20 103.526 3.66% -0.61%
Buy 60 103.350 3.66% -0.60%
Buy 25 103.183 3.67% -0.59%
Buy 9 102.827 3.69% -0.58%
Buy 50 102.450 3.71% -0.56%
Buy 10 102.427 3.72% -0.56%
Buy 50 102.379 3.72% -0.56%
Buy 10 102.213 3.73% -0.55%
Buy 15 102.177 3.73% -0.55%
Buy 15 102.177 3.73% -0.55%
Buy 10 102.123 3.73% -0.55%
Buy 25 102.123 3.73% -0.55%
Buy 20 102.123 3.73% -0.55%
Buy 25 102.105 3.73% -0.55%
Buy 20 102.051 3.74% -0.55%
Buy 20 102.051 3.74% -0.55%
Buy 25 102.033 3.74% -0.55%
Buy 150 102.000 3.74% -0.55%
Buy 100 102.000 3.74% -0.55%
Buy 250 101.875 3.75% -0.54%
Buy 250 101.875 3.75% -0.54%
Buy 10 101.568 3.76% -0.53%
Buy 3 101.277 3.78% -0.52%
Buy 1MM+ 101.159 3.79% -0.51%
Buy 1MM+ 101.123 3.79% -0.51%
Buy 100 101.100 3.79% -0.51%
Buy 30 101.051 3.79% -0.51%
Buy 1,000 101.033 3.79% -0.51%
Buy 1MM+ 101.015 3.79% -0.50%
Buy 1MM+ 100.980 3.79% -0.50%
Buy 500 100.962 3.80% -0.50%
Buy 43 100.951 3.80% -0.50%
Buy 10 100.946 3.80% -0.50%
Buy 1MM+ 100.926 3.80% -0.50%
Buy 123 100.926 3.80% -0.50%
Buy 1MM+ 100.909 3.80% -0.50%
Buy 1,000 100.908 3.80% -0.50%
Buy 1MM+ 100.854 3.80% -0.50%
Buy 1MM+ 100.854 3.80% -0.50%
Buy 18 100.854 3.80% -0.50%
Buy 1,000 100.836 3.80% -0.50%
Buy 1,000 100.836 3.80% -0.50%
Buy 200 100.815 3.80% -0.50%
Buy 1MM+ 100.815 3.80% -0.50%
Buy 150 100.811 3.80% -0.50%
Buy 1MM+ 100.800 3.81% -0.50%
Buy 323 100.800 3.81% -0.50%
Buy 1MM+ 100.783 3.81% -0.50%
Buy 1,000 100.747 3.81% -0.49%
Buy 80 100.730 3.81% -0.49%
Buy 400 100.700 3.81% -0.49%
Buy 1MM+ 100.693 3.81% -0.49%
Buy 550 100.675 3.81% -0.49%
Buy 450 100.659 3.81% -0.49%
Buy 100 100.644 3.81% -0.49%
Buy 1MM+ 100.640 3.81% -0.49%
Buy 1,000 100.533 3.82% -0.48%
Buy 500 100.461 3.82% -0.48%
Buy 1MM+ 100.443 3.83% -0.48%
Buy 1,000 100.337 3.83% -0.48%
Buy 1MM+ 100.283 3.83% -0.47%
Buy 1MM+ 100.195 3.84% -0.47%
Buy 250 99.399 3.88% -0.44%

Type Qty Price Yield AdjYTM
Sell 250 99.383 3.88% -0.44%
Sell 175 99.800 3.86% -0.45%
Sell 150 99.810 3.86% -0.45%
Sell 250 99.866 3.86% -0.46%
Sell 500 99.866 3.86% -0.46%
Sell 250 100.053 3.85% -0.46%
Sell 1,000 100.060 3.85% -0.46%
Sell 550 100.150 3.84% -0.47%
Sell 200 100.177 3.84% -0.47%
Sell 250 100.230 3.84% -0.47%
Sell 1MM+ 100.243 3.84% -0.47%
Sell 1MM+ 100.248 3.84% -0.47%
Sell 1MM+ 100.248 3.84% -0.47%
Sell 1,000 100.266 3.83% -0.47%
Sell 200 100.283 3.83% -0.47%
Sell 1MM+ 100.283 3.83% -0.47%
Sell 500 100.300 3.83% -0.47%
Sell 500 100.301 3.83% -0.47%
Sell 250 100.337 3.83% -0.48%
Sell 500 100.337 3.83% -0.48%
Sell 150 100.337 3.83% -0.48%
Sell 500 100.354 3.83% -0.48%
Sell 200 100.390 3.83% -0.48%
Sell 250 100.404 3.83% -0.48%
Sell 1MM+ 100.416 3.83% -0.48%
Sell 200 100.420 3.83% -0.48%
Sell 250 100.426 3.83% -0.48%
Sell 1MM+ 100.426 3.83% -0.48%
Sell 1,000 100.443 3.83% -0.48%
Sell 1MM+ 100.443 3.83% -0.48%
Sell 350 100.450 3.82% -0.48%
Sell 100 100.461 3.82% -0.48%
Sell 1MM+ 100.479 3.82% -0.48%
Sell 1MM+ 100.497 3.82% -0.48%
Sell 1MM+ 100.497 3.82% -0.48%
Sell 100 100.500 3.82% -0.48%
Sell 100 100.500 3.82% -0.48%
Sell 750 100.500 3.82% -0.48%
Sell 1,000 100.502 3.82% -0.48%
Sell 500 100.514 3.82% -0.48%
Sell 250 100.533 3.82% -0.48%
Sell 200 100.549 3.82% -0.49%
Sell 1MM+ 100.550 3.82% -0.49%
Sell 450 100.550 3.82% -0.49%
Sell 500 100.558 3.82% -0.49%
Sell 125 100.566 3.82% -0.49%
Sell 1,000 100.568 3.82% -0.49%
Sell 200 100.568 3.82% -0.49%
Sell 100 100.568 3.82% -0.49%
Sell 1MM+ 100.568 3.82% -0.49%
Sell 250 100.568 3.82% -0.49%
Sell 1MM+ 100.586 3.82% -0.49%
Sell 1MM+ 100.600 3.82% -0.49%
Sell 1MM+ 100.604 3.82% -0.49%
Sell 1,000 100.604 3.82% -0.49%
Sell 1MM+ 100.604 3.82% -0.49%
Sell 1MM+ 100.622 3.81% -0.49%
Sell 100 100.626 3.81% -0.49%
Sell 1MM+ 100.640 3.81% -0.49%
Sell 100 100.650 3.81% -0.49%
Sell 350 100.654 3.81% -0.49%
Sell 1MM+ 100.657 3.81% -0.49%
Sell 500 100.657 3.81% -0.49%
Sell 1,000 100.693 3.81% -0.49%
Sell 1MM+ 100.693 3.81% -0.49%
Sell 1MM+ 100.693 3.81% -0.49%
Sell 1MM+ 100.694 3.81% -0.49%
Sell 400 100.700 3.81% -0.49%
Sell 250 100.708 3.81% -0.49%
Sell 1MM+ 100.711 3.81% -0.49%
Sell 1MM+ 100.729 3.81% -0.49%
Sell 250 100.747 3.81% -0.49%
Sell 1MM+ 100.747 3.81% -0.49%
Sell 1MM+ 100.747 3.81% -0.49%
Sell 250 100.749 3.81% -0.49%
Sell 1,000 100.765 3.81% -0.49%
Sell 1,000 100.765 3.81% -0.49%
Sell 1MM+ 100.765 3.81% -0.49%
Sell 500 100.774 3.81% -0.49%
Sell 1MM+ 100.774 3.81% -0.49%
Sell 1,000 100.783 3.81% -0.50%
Sell 1MM+ 100.783 3.81% -0.50%
Sell 1MM+ 100.783 3.81% -0.50%
Sell 1MM+ 100.786 3.81% -0.50%
Sell 1MM+ 100.818 3.80% -0.50%
Sell 250 100.836 3.80% -0.50%
Sell 850 100.872 3.80% -0.50%
Sell 1MM+ 100.926 3.80% -0.50%
Sell 1MM+ 101.087 3.79% -0.51%
Sell 1MM+ 101.267 3.78% -0.52%
Sell 1MM+ 101.321 3.78% -0.52%
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