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.

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