Josh Rosenstock, a London-based spokesman for Apple, didn't immediately respond to a phone call and e-mail requesting comment on the bond sale.

Apple is marketing the eight-year securities to yield about 40 basis points more than the benchmark midswap rate and the 12-year notes with a yield premium of about 55 basis points, according to the person familiar with the sale. The average spread for euro-denominated investment-grade bonds maturing between seven and 10 years is 94 basis points, according to Bank of America Merrill Lynch bond index data.

Apple, which holds more than 88 percent of its cash overseas, according to data compiled by Bloomberg, has been pushed by activist investor Carl Icahn to accelerate its stock repurchase program.

The company sold $12 billion of bonds in April after issuing $17 billion in 2013 in the largest corporate bond sale at the time, data compiled by Bloomberg show.

Its $2.5 billion of 3.45 percent notes sold this year have gained 2.9 percent, index data compiled by Bloomberg show. The securities coming due in May 2024 traded at 102.9 cents on the dollar yesterday to yield 3.1 percent, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

Price Guidance

“Apple has already issued a lot in the dollar bond market to fund large share buybacks,” said Jon Brager, a senior credit analyst at Hermes Investment Management, which manages $45 billion in assets. “They don't want to overload their U.S. investor base with additional issuance. This deal should be large. Apple could issue up to 2 billion euros ($2.5 billion) pretty easily.”

The average yield investors demand to hold investment-grade corporate bonds in euros was unchanged at 1.22 percent, or 0.02 percentage point from a record low, according to Bank of America Merrill Lynch index data. That's widened the yield gap with dollar notes to 1.89 percentage points, the biggest discount since October 2008, the data show.

The company is forecasting a record holiday sales quarter after introducing new bigger-screen iPhones and slimmer iPads.

Apple's cash accounted for 10 percent of the $1.65 trillion held by U.S. non-financial companies through the first half of the year, according to an Oct. 20 report by Moody's Investors Service.

Under current law, U.S. companies can defer federal income taxes on most overseas earnings indefinitely. When they do bring back the money to the U.S., they're taxed at the corporate rate of 35 percent, with credits for foreign income taxes paid. Companies paying little in overseas levies face higher U.S. tax bills upon repatriation and can save money by borrowing instead.

Billionaire Icahn wrote an open letter last month to Apple Chief Executive Officer Tim Cook to increase share repurchases and boost the value of the stock, which he said was trading at half its value.

'Great Rates'

“They've got so much cash, and generate so much cash, that they can incrementally increase shareholding funding activity and they will still be fine,” Lon Erickson, a Santa Fe, New Mexico-based money manager at Thornburg Investment Management Inc., said in a telephone interview.

The company, which had authorized a $90 billion share buyback program, has repurchased $67.9 billion of shares as of Sept. 27, according to a regulatory filing last week. Apple also increased its quarterly dividend to 47 cents earlier this year, resulting in a capital returns program that has increased to $130 billion, according to the filing.

“They will probably be able to lock in great rates but investors need to be wary that they could reach a point when credit spreads start to leak wider, especially if interest rates start to rise,” Erickson said.

Bloomberg

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