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IBM Gets Record-Low 1.625% Rate on Seven-Year Dollar Bonds

Pedestrians walk past International Business Machines Corp. (IBM) offices in New York. Photographer: Scott Eells/Bloomberg
Pedestrians walk past International Business Machines Corp. (IBM) offices in New York. Photographer: Scott Eells/Bloomberg

May 2 (Bloomberg) -- International Business Machines Corp. obtained a record-low 1.625 percent coupon on seven-year dollar-denominated debt and tied an all-time low for three-year securities.

IBM’s $1.25 billion of notes due May 2020, which yield 67 basis points more than similar-maturity Treasuries, beat a 1.65 percent rate on $750 million of debt sold last July by semiconductor maker Texas Instruments Inc., according to data compiled by Bloomberg.

The largest computer-services provider also sold $1 billion of notes due in 2016 at a 0.45 percent coupon, matching a record-low for that maturity obtained by Apple Inc., Texas Instruments, Unilever Plc and Walt Disney Co., Bloomberg data show. The debt pays a relative yield of 25 basis points.

The bonds may be rated Aa3 by Moody’s Investors Service, according to a person familiar with the transaction, who asked not to be identified citing lack of authorization to speak publicly.

IBM, based in Armonk, New York, last sold debt in February, issuing $1 billion each of two-year, floating-rate notes and 1.25 percent, five-year securities, Bloomberg data show.

Bank of America Corp., BNP Paribas SA, Royal Bank of Scotland Group Plc and Wells Fargo & Co. managed today’s offering.

To contact the reporter on this story: Sarika Gangar in New York at sgangar@bloomberg.net

To contact the editor responsible for this story Alan Goldstein at agoldstein5@bloomberg.net

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