Why Apple borrowed $6.5 billion despite owning billions

Tech giant Apple sold $6.5 billion in bonds on Monday, according to Bloomberg.

Apple did this as a quick way to raise capital for share buybacks and other expenses.

Apple has $178 billion in cash and just two years ago sold $17 billion in what was then the largest corporate bond sale in history. It was surpassed later in 2013 by Verizon's $49 billion bond offering. Overall, Apple has issued $32.5 billion of bonds in three offerings since April 2013, according to Bloomberg.

The company is planning to borrow the money because almost 90 percent of the cash is held outside the US and it would be required to pay the top corporate tax rate of 35 percent if it returned the money from abroad.

Wells Fargo analyst Maynard Um believes that Apple's $20 billion in onshore cash and the $6.5 billion bond offering would easily pay for the current share repurchase program and a projected 9 percent increase in the company's dividend, but would not stretch beyond that.

According to a note released by Um, Apple raised $17 billion in 2013 and increased the buyback program by $50 billion with $42 billion in domestic cash on the balance sheet. 2014 brought a $12 billion raise with $18 billion in domestic cash and a $30 billion increase to the repurchase initiative.

Apple paid a lower overall interest rate on Monday's deal than its previous U.S. bond sale last April, when it sold $12 billion. A 10-year note sold Monday offered a yield of roughly 2.5 percent, compared with the 3.46 percent Apple paid in April.