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IBM Sells Floating Debt Below Libor in $2 Billion Bond Offering

Feb. 5 (Bloomberg) -- International Business Machines Corp. raised $2 billion in a two-part bond offering that included floating-rate debt yielding less than the benchmark interest rate for more than $300 trillion of financial products.

The largest computer-services provider issued equal $1 billion portions of notes due 2015 that pay 2 basis points less than the London interbank offered rate and 1.25 percent securities maturing 2018 that yield 47 basis points more than similar-maturity Treasuries, according to data compiled by Bloomberg.

IBM’s floater sale follows offerings last year by Coca-Cola Co. and Procter & Gamble Co., which both issued securities paying less than Libor, the rate at which banks say they can borrow in dollars from each other. Proceeds from IBM’s sale will be used for general corporate purposes, the Armonk, New York-based company said today in a regulatory filing.

The computer maker’s $1.6 billion of 7.625 percent bonds due October 2018 traded yesterday at 132 cents on the dollar to yield 1.7 percent, or 81 basis points more than Treasuries, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

IBM last sold floating-rate debt in December 2010, with a $1 billion offering of securities due June 2012 that paid 3 basis points more than Libor, Bloomberg data show. The new bonds are expected to be rated Aa3 by Moody’s Investors Service.

To contact the reporter on this story: Charles Mead in New York at

To contact the editor responsible for this story: Alan Goldstein at

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