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Subject:  Re: Apple’s Bonds Date:  5/1/2013  10:06 AM
Author:  globalist2013 Number:  34871 of 36468

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.

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