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Apple Inc. (AAPL): A Closer Look Back At The Bond Issue

In the high-yield space, Constellation Brands, Inc. (NYSE:STZ) popped the cork on eight- and 10-year paper totaling $1.55 billion. In this case, “high yield” is only 3.75% and 4.25%, respectively. The money will be used to help fund the company’s acquisition of the 50% of Crown Imports it doesn’t own, along with Grupo Modelo’s brands. The company will also be tapping credit facilities for about $3 billion in addition to this note issue to finance the deal.

Even with the big offerings from Apple Inc. (NASDAQ:AAPL) and CNOOC Limited (ADR) (NYSE:CEO), I think the low rates for high-yield deals are the most interesting part of recent new bond issues. Investors are bidding up the prices — which lowers rates — on these deals to the point where there isn’t much risk premium for the lower credit quality. The rates on the Constellation Brands, Inc. (NYSE:STZ) paper don’t leave much for either credit-rate or interest-rate risk.

The article Apple’s Record Bond Issue originally appeared on is written by Russ Krull.

Russ Krull has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and International Business Machines (NYSE:IBM).

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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