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Apple Borrows Billions for Next to Nothing

Apple has $145 billion in cash but $102 billion of it is overseas and effectively out of reach

Apple has started borrowing money to underwrite the three-year $60 billion share buy-back program it promised stockholders last week.

The company is also going to pay out $55 billion in dividends through 2015.

It's issued floating-rate notes maturing in 2016 and 2018 and fixed-rate securities due in 2016, 2018, 2023 and 2043, it said in a regulatory filing, starting with a bond offering worth $17 billion on Tuesday, reportedly the largest non-bank bond offering ever.

It was swamped with orders reportedly worth $50 billion.

Apple will pay around 0.5% on three-year notes, 1.07% on five-year notes, 2.42% on 10-year notes and 3.88% on 30-year bonds. Next time the yields could be lower.

Apple has $145 billion in cash but $102 billion of it is overseas and effectively out of reach because the company doesn't want to pay the taxes to repatriate it.

Apple has no debt but still couldn't get the Triple A rating from S&P and Moody's that Microsoft has reportedly because of the uncertainties of the consumer market and doubts about its continued innovation.

The debt move is widely interpreted as meaning Apple's is no longer a growth stock.

Its stock was up almost 3% Tuesday to close at $442.78.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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