TOKYO—Apple Inc. will likely issue the company's first
yen-denominated bonds in June in Japan, sources familiar with the
issuance said Wednesday, in the latest of several moves to take
advantage of rock-bottom interest rates in some non-U.S.
markets.
The U.S. tech giant will issue ¥200 billion ($1.6
billion) of yen-denominated bonds and use the proceeds for
shareholder returns and possibly also to expand Japanese
operations, one person familiar with the matter said.
Japanese bond yields and issuance costs are some of the lowest
in the world as the central bank keeps interest rates low with its
massive monetary easing program.
Bond market participants say that the Apple issuance will likely
draw strong interest from domestic investors if it offers an
attractive yield.
An Apple spokesman wasn't immediately available for comment.
Apple said in December that it would open a new research site
near Yokohama, after Prime Minister Shinzo Abe disclosed the
company's plans to invest in Japan during a campaign rally. Apple
later said that it would take over part of a former Panasonic Corp.
factory and erect a four-story building on the site. Work is set to
begin by the end of year.
Apple has opened research and development sites in a number of
countries around the world, apart from its headquarters in
Cupertino, Calif.
Apple's iPhone has the leading share of the smartphone market in
Japan, where the U.S. brand has eclipsed local handset providers
such as Sony Corp. and Sharp Corp., as well as international rivals
such as Samsung Electronics Co.
The company's likely move to sell bonds in Japan isn't its first
move to raise cash abroad. In February, the company completed a
sale of bonds denominated in Swiss francs, taking advantage of
Switzerland's low borrowing costs. Last year Apple also raised debt
in euros.
The company has been using proceeds from debt sales to fund
payment of dividends and to buy back shares. It has been using
newly issued funds for these purposes rather than using its
overseas holdings of cash from foreign earnings, which would be
taxed if brought back to the U.S.
Moody's Investors Service has assigned an Aa1 rating to Apple
debt, its second-highest ranking after Aaa.
Write to Takashi Mochizuki at takashi.mochizuki@wsj.com and
Eleanor Warnock at eleanor.warnock@wsj.com
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