In the past the Australian corporate bonds market has been known to be relatively small due to very few Australian businesses that are large on an international scale (Australian Centre for Financial Studies 2015). Corporate bonds globally are relatively large as they are an alternative form of business finance to bank loans or using equities (The Australian Business Review 2014). Until august 2015, the world’s largest technology company, Apple Inc., that has the largest cash pole at $US200 billion, decided to set price at $2.25 Billion kangaroo bond issues (bonds sold by foreign entities into the Australian dollar market), beating the record for the largest corporate bond in Australia (Financial Review 2015). When Apple order books were finally opened for the four …show more content…
This in itself proves an image of high quality that the company brings to the Australian Bonds market and allows other huge international companies to feel a sense of comfort to funding in the sector. Apple is the largest technology company worldwide, it is hardly necessary of such investment with the Australian bond market, so why would the company consider issuing these bonds? For one, if apple decided to dispatch the $US200 billion in the US they would have to pay taxes at a rate of 35% (Yield Report 2015). By leaving the money outside it can give time and more ways to minimize paying corporate taxes, such as issuing bonds that create more tax efficiency with the interest on bonds that are tax deductible. Apple without a doubt has considered issuing the bonds in Australia through the influence of SAB miller, global brewer, who raised $700 million of five year debt from Australia (Business Insider 2015). SAB miller is one of the world’s four largest brewers internationally that produce more than half the world’s