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Apple Inc.: The Second Green Bond (SPANI...

Lipson, Marc L., O...

Case

Apple Inc.: The Second Green Bond (SPANISH)

Lipson, Marc L.; O'Brien, Robby

F-2113 | Published April 10, 2025 | 16 pages Case

Collection: Darden School of Business

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This is a Spanish translation of the Jan. 10, 2024 version of UVA-F-2022. Lisa Jackson, vice president of Environment, Policy and Social Initiatives at Apple Inc. (Apple) and, previously, the first African American administrator of the Environmental Protection Agency, was preparing for questions that might arise in relation to Apple’s upcoming 10-year $1 billion green bond issue, Apple’s second such offering. The case explores the economics of bond pricing in general, and green bonds in particular, by describing the results of the first issue, focusing on possible reactions to the second issue, and surfacing concerns that arise in connection with green bond markets. The possible positive impact on the environment from green bond issues is contrasted to concerns about greenwashing and the stark reality that Apple’s first green bond exhibited at best a very small reduction in yields relative to comparable conventional bonds (a very small so-called greenium). The case provides a basis for discussion of green bond markets and enough information to estimate a yield for the new bond. Case data allow a yield estimate based on the yield curve of Apple’s outstanding issues, bonds of comparable firms, and Apple’s bond rating. All comparable yields are provided so the case discussion can focus on the underlying drivers of yields: a baseline risk-free rate that can vary by time to maturity, an added risk premium, and adjustments based on other characteristics that might affect supply and demand. While not central to the case, sufficient information is provided to critically evaluate Apple’s bond rating at the time and comment on Apple’s growing use of debt financing. This case has been used successfully to generate a discussion of green bond markets in an elective course and as an introduction to bond pricing in a core finance class. It has also been used successfully in an Executive Education program to explore the advantages and disadvantages to a firm of employing green bonds in financing investments.