Apple Inc., the iPhone maker seeking to help finance a $100billion capital reward for shareholders with borrowed money, maysell its first bonds in almost two decades as soon as today with asix-part offering.

The company intends to issue debt that includes floating-ratenotes maturing in 2016 and 2018 and fixed-rate securities due in2016, 2018, 2023 and 2043, Apple said today in a regulatory filing.Proceeds may help Cupertino, California-based Apple avoid so-calledrepatriation taxes on its $102.3 billion of funds held overseas asit returns an additional $55 billion to shareholders through 2015to compensate for a stock that's been hammered by signs of slowinggrowth.

“You'll see a meaningful amount of interest,” Ashish Shah, thehead of global credit investment at New York-basedAllianceBernstein LP, which oversees $256 billion in fixed-incomeassets, said in a telephone interview. “It's a high-quality namewhich brings in a lot of different kinds of buyers.”

The offering, being managed by Goldman Sachs Group Inc. andDeutsche Bank AG, follows a $1.95 billion dollar sale last weekfrom Microsoft Corp. The world's biggest software maker issued $1billion of 10-year, 2.375 percent securities to yield 70 basispoints more than Treasuries, according to data compiled byBloomberg. They traded yesterday at 100.2 cents on the dollar toyield 2.35 percent, according to Trace, the bond-price reportingsystem of the Financial Industry Regulatory Authority.

Apple may sell as much as $20 billion of debt, Tom Tucci,managing director and head of Treasury trading in New York at CIBCWorld Markets Corp., said in an e-mail today. That would make itthe largest dollar-denominated offering on record. Roche Holding AGtops the list with a $16.5 billion six-part deal from February2009, followed by AbbVie Inc.'s $14.7 billion six-part issue inNovember, Bloomberg data show.

“There's strong demand for bonds across the board,” AnthonyValeri, a market strategist with LPL Financial Corp. in San Diego,which oversees $350 billion, said in a telephone interview. “Whenyou bring in a new name to a starved market I think it will be wellreceived.”

Average yields on investment-grade debt worldwide dropped to arecord-low 2.45 percent yesterday from 3.37 percent a year ago,according to Bank of America Merrill Lynch's Global CorporateIndex.

No AAA

While Apple's $145 billion of cash is more than the combinedfunds of every AAA rated U.S. company including Microsoft, itfailed to win the bond market's highest credit grade from Moody'sInvestors Service and Standard & Poor's. Moody's rated the firmAa1 with S&P giving it a grade of AA+.

That rating tier is “inconsistent” with Apple's credit risk,according to Fitch Ratings, which yesterday said the company's“significant liquidity cushion” was overshadowed by the threat ofvolatile consumer preferences, significant competition and rapidtechnology changes. While Fitch hasn't released a public grade forApple, it said such a ranking would likely fall “at the highestend” of the single-A tier, lower than where Moody's and S&Pgraded the debt.

Microsoft, along with Johnson & Johnson, Exxon Mobil Corp.and Automatic Data Processing Inc., is rated Aaa by Moody's and AAAat S&P.

Concern that Apple's pace of sales growth is slowing werereinforced last week by a forecast for narrowing gross margins andsales this quarter that may miss analysts' predictions by as muchas $4.9 billion. Apple had its first profit decline in a decadelast quarter amid accelerating competition in mobile devices fromSamsung Electronics Co.

Using new debt to finance Apple's $55 billion addition to itsplan to return cash to shareholders through 2015 with buybacks anddividends may require annual issuance of between $15 billion and$20 billion, Ping Zhao, an analyst at CreditSights Inc. in NewYork, wrote in a report April 23. Apple would probably receive a“very attractive rate” for as much as $50 billion in new debt,Barclays Plc analyst Ben Reitzes wrote in a report last month.

Apple's debt sale is coming more than nine years after thecompany cleared its balance sheet of bonds when the $300 million of6.5 percent 10-year notes it sold in February 1994 matured. Appleissued new convertible debt in 1996 that was called in 1999,Bloomberg data show.

Bloomberg News

Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.