Michael Kastner, principal at Halyard Asset management in New York said bond buyers were usually wary of buying debt from companies seeking to buy back shares but that because Apple was sitting on so much cash, this was likely to be a very popular sale.
Kastner said it was part of a larger trend as corporations seek to take advantage of historically low interest rates. “Companies are borrowing cheap and buying back shares and in the process improving their earnings per share. We saw this in the last low interest rate cycle, but never to this degree,” he said.
Kastner said that the corporations were likely to continue turning to the bond market to raise cash for as long as the Federal Reserve keeps rates low.