Apple Inc (AAPL) Stock Rises as Anticipation Builds for Spring Release of Apple Watch; Apple Sells Euro Bonds

Apple Inc (AAPL) shares reached $110.30 per share last November 3 and the company appears to be going strong based on analysts' observations. Apple's iPhone 6 and iPhone 6 Plus launch proved to be a success in the consumer market despite several issues like the controversial #Bendgate and software update bugs.

Last week, Apple has priced its first non-dollar bonds at record-breaking levels. It set 1.082 percent yield on an eight-year bond and a 1.671 percent yield for a 12-year bond, according to a CNBC report. While some might find it unusual for Apple to offer euro bonds, analysts believe the company has several good reasons for the move. Apple cannot maximise the use of its cash without taking care of tax obligations. Reports said Apple has $155 billion in cash by the end of September. However, foreign subsidiaries hold about $137 billion of the company's money. The company has previously said it will have to pay repatriation taxes for most of its cash if it attempts to bring the money in the U.S.

Analysts expect another move from Apple to generate more cash. Since the company has spent $94 billion on dividends and stock buybacks out of a $130 billion programme. The company is expected to spend the remaining amount on more share repurchases and dividends until the end of 2015 when the programme is scheduled to end.

Apple venturing into euro bonds than selling more U.S. dollar bonds may make more sense on a financial aspect. The company had sold its first bonds in April 2013 after nearly 20 years with a record-breaking $17 billion offering. Apple offered a $12 billion bond last April 2014 as a follow-up.

Rosenblatt Securities chief market strategist Brian Reynolds estimated Apple to pay between a 1.5 and 2 percent on a euro deal depending on the size compared to the company's existing 10-year U.S. dollar bond yield of 3.08 percent. Analysts believe that even if the company has no need for euros to support its operations in Europe, offering a euro bond remains a sensible move. Apple can exchange it's the cash flows related to the euro bond into U.S. dollars to achieve at least equal or higher terms than a U.S. dollar bond.

Meanwhile, investors are eagerly anticipating the release of the Apple Watch in the market. It was first reported in 9to5 Mac that Apple's first smart wearable device may debut in the spring of 2015 after the Chinese New Year on February 25. Apple has previously announced that the smartwatch will be sold for $349. Investors are expected to wait and see how the Apple Watch is going to affect the company's stock price in 2015.