These Banks Made Hay With the Apple Bond Sale

MoneyAlthough the primary purpose of Apple’s (NASDAQ:AAPL) $17 billion bond sale was to provide funding for its $100 billion shareholder capital return plan, the unusually large offering also had a beneficial side-effect on Apple’s underwriting partners. According to a U.S. Securities and Exchange Commission filing yesterday, Apple paid the banks that assisted in the deal a total of $53.3 million in fees. These fees are typically split among the underwriters based on the proportional amount of the sale that each firm processed.

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The main beneficiary of these fees was Goldman Sachs (NYSE:GS), which received a $38.3 million payout for handling 72 percent of the six-part bond offering. Even so, Goldman Sachs’ bonanza was only based on a 0.313 percent portion of the overall amount of funds raised. The average percent paid on investment-grade U.S. corporate bonds is 0.483 according to Bloomberg data. Apple received an Aa1 senior unsecured rating from Moody’s and a comparable AA+ rating from S&P.

Deutsche Bank handled the second-largest portion of the deal, underwriting 17.5 percent of the total bonds. This entitled Deutsche Bank to a total of $9.3 million in fees.

Although Goldman Sachs and Deutsche Bank earned the lion’s share of the fees, five other underwriters benefitted from Apple’s bond offering. Barclays (NYSE:BCS) and Standard Chartered each handled 1.5 percent of the deal which gave them each a fee of $798,750. Citigroup (NYSE:C), JPMorgan (NYSE:JPM), and Bank of America’s (NYSE:BAC) Merrill Lynch unit each processed 2.5 percent of the total sale. This earned each of these banks $1.3 million in fees. Not bad for a day’s work.

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