Apple Just Got More Valuable

U.S. structured notes related to Apple’s (NASDAQ:AAPL) share price totaled $1.47 billion in sales this year, with the biggest sale coming in October. That puts the value of the Apple-linked securities a hairbreadth behind the London interbank offered rate as the second most commonly linked underlying, according to Bloomberg. Offerings linked to Libor totaled $1.473 billion for the year, about $2 million more than Apple.

In October, investors bought $357.2 million of Apple notes in 104 offerings in what was the biggest sale over a month since January 2010.  In comparison, a total of two deals linked to Libor were worth $19 million. Libor, the rate at which banks borrow in dollars from each other, is close to a 15-month low.

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The year’s best-selling note linked to Apple was issued by JPMorgan Chase (NYSE:JPM) on August 30 and pays 13.56 percent a year as long as the company’s share price doesn’t fall below 80 percent of its initial value. Apple shares are up 34 percent since the beginning of the year.

Its annual potential yield is 12 percentage points more than for the largest Libor-tied security, made by the Royal Bank of Canada (NYSE:RY) on August 22. The $200 million of three-year notes pay 0.935 percent for the first year and then yield 0.43 percent more than the three-month dollar Libor rate. With that rate at 0.3118 percent on Friday, that return would be less than half of the U.S. inflation rate of 2 percent, according to Bloomberg.

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