NEW YORK, Feb. 3 (UPI) -- Apple sold $6.5 billion in bonds Monday with a 30-year debt that will pay 3.5 percent annually.
The sale is the largest of the year so far and allowed the company to tap the debt market a week after announcing a 38 percent increase in profits the last quarter. The sale is a testament to how voracious investors are for the iPhone maker.
"Apple has proven itself to be pretty thoughtful and shrewd when it comes to capital allocation over the last couple of years, and that hasn't been lost on the bond market," Scott Kessler, a technology analyst at S&P Capital IQ, told Bloomberg News. "It makes sense for them to be active participants in the corporate bond market."
Apple has been turning to bonds rather than using cash made overseas, which would be subject to repatriation taxes. In the federal budget proposed Monday, President Barack Obama suggested taxing profits made by American companies overseas even if they are not brought back to the United States, closing the tax loophole.
The sale, greater than the $5 billion expected by investors, is making Wall Street wary of the bullish market indicator and the uncertainty of shadowing corporate bonds. Lack of faith in corporate bonds darkens the prospects for the U.S. economy as well.
"We're just a little nervous of where the economy is headed right now," said Chris Coolidge, a portfolio manager at Brandywine Global Investment Management, told the Wall Street Journal. "We'll see how this commodity story plays out."