Apple talks massive note offering in six tranches; pricing Tuesday

By Andrea Heisinger

New York, April 30 - Apple Inc. gave talk for its much-anticipated first sale of notes (Aa1/AA+/), to be priced in six tranches on Tuesday, according to market sources and a 424B2 filing with the Securities and Exchange Commission.

A source said at midday that initial investor demand was for $5 billion to $6 billion but had ballooned to about $40 billion. The company could price in the ballpark of $15 billion of bonds, the source said.

Included in the sale are floating-rate tranches due 2016 and 2018. Both are non-callable.

The three-year floaters have talk in the Libor plus 10 basis points area, and the five-year tranche has guidance in the Libor plus 30 bps area. Both have a margin of plus or minus 5 bps.

The remaining tranches are fixed-rate notes due 2016, 2018, 2023 and 2043.

The three-year notes have talk in the Treasuries plus 25 bps area, the five-year bonds have guidance in the 45 bps area, and the 10-year tranche is being talked in the 80 bps area. The 30-year bonds have guidance in the 105 bps area.

All of the talk on the fixed-rate notes has a margin of plus or minus 5 bps.

Bookrunners are Goldman Sachs & Co. and Deutsche Bank Securities Inc.

Proceeds will be used for general corporate purposes, including common stock repurchases and dividend payments under a recently expanded program to return capital to shareholders.

The computer and mobile communications device company is based in Cupertino, Calif.

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