TOKYO -- In what will be its first fundraising activity in Japan, Apple is considering issuing about 200 billion yen ($1.62 billion) in bonds as early as June.
The U.S. technology company aims to procure funds at low cost by taking advantage of rock-bottom interest rates in Japan. It will likely use the proceeds to boost shareholder rewards and possibly expand Japanese operations.
Early this month, Apple started gauging potential demand for the yen-denominated bonds among regional banks, life insurers and other institutional investors. The bonds will target Japanese investors but will likely be sold to overseas investors as well.
Citigroup's 2007 bond issuance of 270 billion yen stands as the biggest yen-denominated float by a foreign company, according to financial service data provider I-N Information Systems. Apple's will likely be the largest since.
It is likely that Apple will be able to set an interest rate on bonds in Japan about 1 percentage point lower than in the U.S., enough of a difference to save on costs even after converting the money back into dollars. Apple has a high credit rating of AA+.
Apple has been spreading out its fundraising beyond the U.S., opting for markets where interest rates are low. Since last year, the company has issued 2.8 billion euros ($3 billion) and 1.25 billion Swiss francs ($1.31 billion) in bonds.