Apple’s $145 Billion in Cash Fails to Win AAA

Rating agencies cite volatility of tech industry as company prepares to issue debt.

A debt-free balance sheet with more cash than the combined funds of every AAA-rated U.S. company failed to win Apple Inc. the bond market’s highest credit grade as the iPhone maker prepares to borrow to enrich shareholders.

Apple, which has $145 billion of cash, said yesterday it plans to use debt to help finance a $100 billion capital reward for shareholders after a 42 percent stock plunge. Moody’s Investors Service and Standard & Poor’s responded by ranking the company a level below their top grades, with Gerald Granovsky of Moody’s citing “shifting consumer preferences” in a statement as a risk to Cupertino, California-based Apple’s business.

Cash Flow

“I don’t expect them to come cheap,” Dorian Garay, a New York-based money manager for an investment-grade debt fund at ING Investment Management in New York, said in a telephone interview.

Cash Hoard

The company held $94.2 billion of cash, cash equivalents and marketable securities in foreign subsidiaries at year-end, Apple said in a Jan. 24 regulatory filing.

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