Apple Is the New Pimco, and Tim Cook Is the New King of Bonds

Bloomberg reports:

There’s a new whale in the corporate-bond market.

Apple Inc., Oracle Corp. and the other tech giants hoarding half a trillion dollars in cash have joined the ranks of the biggest buyers of the debt, often snapping up as much as half of some bond issues, according to five people with knowledge of the transactions.

The companies are muscling into a market traditionally dominated by big bond funds including Pacific Investment Management Co., BlackRock Inc., Vanguard Group Inc. and Fidelity Investments. They’re homing in on one of asset managers’ favorite ways to juice returns, particularly as the Federal Reserve holds short-term interest rates near zero for a seventh year.

“We treat them as we treat Fidelity or Vanguard or any other investor,” said Curt Zuber, treasurer of Sydney-based Westpac Banking Corp., which has issued $6.1 billion of U.S. dollar-denominated bonds in the financial year started Oct. 1 and a total of $22 billion since October 2012.

All four of Australia’s biggest banks, heavily reliant on offshore debt markets, have sent representatives to Reno, Nevada, where Apple’s money-management unit, Braeburn Capital Inc., is based, according to people with knowledge of the trips. Oracle’s cash managers are also based in the city known for its casinos, where hotel rooms costing as little as $69 a night provide cheaper lodgings than banker stops in New York, Boston and Newport Beach, California, where Pimco is based.

An article well worth your time. Thank you Federal Reserve for creating the next credit bubble !