According to reports (and confirmed by a source we spoke to) demand for the bonds is insane. Demand is far outstripping supply.
How come?
It's not because people are incredibly bullish on Apple, or think the company is going to do all that well.
It's because the company's balance sheet is incredibly safe (it's got a huge cash pile and it's still raking in tons of cash each quarter), and there's a shortage of safe, investible debt out there.
That's right. Despite what you've heard about a world drowning in debt, there's actually a safe asset shortage, as the issuance of investible securities is down dramatically from before the crisis.
This chart from Citi (via Cullen Roche) shows how total issuance of investible assets (red line) is very low, with financial bond all but disappearing, non-financial bonds remaining minimal, share issuance non-existent, and Central Banks hoovering up a lot of government debt.
 Citi |
So given the huge shortage of safe assets out there, it's no wonder that people are going insane for Apple paper.