Apple starts record-breaking bond sale with $17bn kick-off

Slowing iPhone and iPad sales prompts scheme to hand money back to shareholders

Apple is embarking on potentially the largest bond sale in history, as it prepares to sell $17bn (£11bn) worth of bonds to help fund the company's share buyback scheme.

Introduced yesterday on the New York Stock Exchange, the sale already looked to be attracting around three times the amount of interest that Apple had hoped for.

As part of a reaction to slowing sales, company CEO Tim Cook pledged last week to give $100bn of Apple's accumulated wealth back to shareholders by the end of 2015. The bond sale has also been described as the most tax-efficient way for Apple to start carrying out this promise.

About two-thirds of Apple's $145bn fortune is kept overseas and if it were repatriated it would automatically attract corporation tax at the standard rate of 40 per cent.

However, selling bonds enables the £11bn to be written off as a debt against tax, rather than having to pay out tax for simply repatriating the money. The bonds will have a range of maturities between three and 30 years.

When it filed with the stock market regulator, the Securities and Exchange Commission, on Monday, Apple said it planned to the use the proceeds of the bond sale for "general corporate purposes, which may include, but aren't limited to, funding for working capital, payment of dividends, capital expenditures, repurchases of our common stock, and acquisitions".

Last week, Apple confirmed its first quarterly drop in profits for ten years, but the company's shares have risen again by nine per cent since it announced the plan to return $100bn in accumulated cash to shareholders.

Due to the profitability of Apple's consumer and computing products, it typically generates more than $50bn (£32bn) in free cashflow every year.