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Tech Giants Are Whales of Corporate Bonds

Companies sitting on huge piles of cash now compete with bond funds like Pimco and BlackRock to buy corporate debt.

By Nabila Ahmed and Mary Childs, Bloomberg | Updated on June 08, 2015

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.

"I am sure asset managers like Vanguard and Pimco would prefer Apple call them and have them manage the money rather than competing with them." --Kevin McPartland, Greenwich AssociatesThe companies are muscling into a market traditionally dominated by big bond funds including Pacific Investment Management Co. (Pimco), BlackRock Inc., Vanguard Group Inc., and Fidelity Investments. They’re honing 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.

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