Apple raises cash

Apple raised more money yesterday, 6.5 billion Dollars to be exact. Why would the corporate with more money than any other company raise money in the debt markets? Well, remembering that US corporate tax laws are not kind to companies that earn money offshore, bring it "home" and you will be taxed. Even though you have paid tax on it already. President Obama is exploring a once off repatriation of cash at a lower rate once off, and then an ongoing tax rate (at a lower rate) in order to get this un-stuck. The issue of cash repatriation. Businesses like Apple, with strong balance sheets, awesome credit ratings and great cash flows can sell debt in the yield starved markets at rates of around 3.5 percent and less. Use it for what exactly? As the FT article points out, Apple taps bond markets for $6.5bn, via the SEC filing proceeds are to be used for "general corporate purposes, including repurchases of our common stock and payment of dividends under our program to return capital to shareholders, funding for working capital, capital expenditures and acquisitions and repayment of debt." The company can use existing cash flows in the US to service their debt, buy back shares and pay dividends.

Meanwhile Apple also announced that they were going to be building a command centre in a place called Mesa, which is in Arizona. If you were paying attention in geography class you would recall a mesa and a butte. Remember? Mesa is in the desert, the Sonoran desert. There is loads of sunshine, generally, in the desert. Apple bought the location from the business that was involved in supplying them sapphire glass. All the energy will be via solar power, and they will have the ability to supply 14500 houses according to the TechCrunch article: Apple To Build A $2 Billion Data Command Center In Arizona. I guess 2 billion relative to their market cap of 685 billion is not a lot, the important thing is that a facility for warehousing client data is being created as a standalone. To be powered by the sun, there is still energy left in that giant ball in the sky (don't look at it).