Companies issue bonds to raise funds, refinance debt, and manage cash flow. In 2020, Tencent issued $5 billion in bonds to expand its global business and increase its cloud computing market share. Apple issued $5 billion in green bonds in 2019 to build a 1.2-gigawatt solar power plant. Through these actions, companies obtain funds at lower interest rates, avoid equity dilution, optimize capital structure, and reduce financial risk.
Raising Expansion Funds
In 2023, Tencent raised $5 billion through bond issuance for global business expansion and technological innovation, accounting for 30% of its annual R&D budget. This significantly enhanced its competitiveness in AI and cloud computing, with an expected market share increase of 20% and annual revenue growth of $1.5 billion over the next five years. Alphabet, Google’s parent company, raised $7 billion the same year, with 50% used for data center construction, improving data processing efficiency by 20% and saving over $500 million in annual operating costs.
Huawei raised $3 billion in bonds in 2019 for 5G technology R&D and market promotion, boosting its market share in Europe from 15% in 2018 to 25% in 2020. Huawei invests $10 billion annually in 5G technology, accounting for 15% of its total revenue, maintaining a leading position in the global 5G market with an annual income growth rate of over 10%.
In 2020, Apple issued $4 billion in green bonds to support sustainable development projects, including the construction of eco-friendly data centers powered entirely by renewable energy. Apple’s environmental projects reduce carbon dioxide emissions by 300,000 tons annually, equivalent to removing 65,000 cars from the road.
Refinancing Existing Debt
In 2022, AT&T issued $3 billion in low-interest bonds to refinance its high-interest debt, saving approximately $200 million in annual interest expenses, reducing annual financial costs from $1.5 billion to $1.3 billion. This lowered costs and improved credit ratings. Ford issued $5 billion in bonds the same year, replacing 6.25% interest debt with 3.5% interest debt, saving approximately $140 million in annual interest, easing financial pressure.
General Electric issued $4 billion in bonds in 2021, replacing 5.875% interest debt with 3.25% interest debt, saving about $105 million in annual interest. This improved cash flow and increased investor confidence, with stock prices rising 8% within a month. Morgan Stanley issued $2 billion in bonds the same year, replacing 4.75% interest debt with 2.5% interest debt, saving about $45 million annually and enhancing competitiveness in the financial market.
Intel issued $4.5 billion in bonds in 2020, replacing 7% high-interest debt with 2.75% interest debt, saving about $200 million annually. By reducing debt costs, Intel invested more funds in R&D and market expansion. Apple issued $6 billion in bonds in 2019, converting high-interest debt to 3% low-interest debt, saving about $180 million annually, improving capital efficiency, and providing funding for innovation projects.
Managing Cash Flow
Amazon optimized inventory management in 2022, reducing inventory turnover time from 45 days to 30 days, saving $200 million annually in storage costs, and increasing liquidity by 10%. Walmart improved inventory turnover by 15% through similar strategies, saving $150 million annually and improving cash flow.
Apple adjusted its supply chain strategy in 2021, shortening the raw material procurement cycle from 60 days to 40 days, saving $300 million annually in procurement costs. Apple’s liquidity increased from $50 billion in 2020 to $55 billion in 2021, allowing for more flexible investment in new product development and marketing. Dell optimized its supply chain, reducing the cash conversion cycle from 75 days to 50 days, saving $200 million annually and enhancing financial flexibility.
Alphabet optimized accounts receivable management in 2020, reducing accounts receivable turnover days from 35 to 20, increasing cash flow by $500 million annually. Alphabet’s free cash flow grew from $30 billion in 2019 to $35 billion in 2020. Microsoft reduced accounts receivable turnover days from 40 to 25, increasing cash flow by $300 million annually, enhancing financial flexibility and investment opportunities, and maintaining market competitiveness.
Tax Incentives
The 2018 U.S. tax reform reduced corporate tax rates from 35% to 21%, saving Apple nearly $17 billion in taxes. Apple’s after-tax net income increased from $48.3 billion to $59.5 billion, a 23% increase. Alphabet saved about $3.2 billion through tax incentives the same year, with net income increasing from $12.7 billion to $15.9 billion, a 25% increase.
In 2019, Amazon saved about $1.4 billion in taxes through R&D tax credits. Amazon’s R&D spending that year reached $35 billion, accounting for 12% of total revenue, significantly enhancing its competitiveness in AI and cloud computing. Tesla saved about $500 million through new energy vehicle tax incentives, helping reduce Model 3 production costs by 10%, increasing profitability, and solidifying its position in the electric vehicle market.
In 2020, Microsoft saved about $2 billion through international tax incentives. Microsoft’s global effective tax rate dropped from 19% to 12%, with annual net income increasing from $39.2 billion to $44.2 billion. Facebook saved about $1.5 billion the same year through similar policies, using the funds to invest in data privacy and security technologies, enhancing user trust, and increasing active users by 8% year-on-year.
Diversified Funding Sources
In 2020, Alibaba issued $5 billion in dollar bonds and $3 billion in yuan bonds, diversifying funding sources, mitigating exchange rate risk, and expanding cloud computing business, with market share increasing from 35% to 40%. Tencent issued $4 billion in bonds the same year, investing in fintech and social media, with annual revenue growing by 15%.
Apple issued $5 billion in green bonds in 2019 to build global solar power plants with a total capacity of 1.2 gigawatts, supplying electricity to 1.5 million households. Through diversified funding sources, Apple reduced financing costs and enhanced its reputation in sustainable development. Tesla issued $2 billion in convertible bonds in 2020, strengthening its competitive position in the electric vehicle market, with Model 3 global sales increasing from 300,000 to 500,000 units.
Microsoft issued $6 billion in long-term bonds and $3 billion in short-term bonds in 2021, optimizing its capital structure, and investing in R&D and acquisitions of emerging technology companies, increasing market share in AI and cloud computing by 10%. Facebook issued $4 billion in bonds the same year to expand virtual reality and augmented reality technologies, effectively diversifying financial risk and stabilizing cash flow.
