Published on 5/9/2019 in the Prospect News Investment Grade Daily.
New Issue: IBM gives further details on $20 billion eight-tranche sale of notes
By Devika Patel
Knoxville, Tenn., May 9 – International Business Machines Corp. offered further details about a $20 billion eight-tranche offering of notes (A1/A/A) that priced on Wednesday, according to an FWP filed with the Securities and Exchange Commission.
The company sold $1.5 billion of two-year floating-rate notes at Libor plus 40 basis points. These notes priced at par.
IBM priced $1.5 billion of 2.8% two-year fixed-rate notes with a spread of Treasuries plus 50 bps. These notes priced at 99.994 to yield 2.803%.
A $2.75 billion offering of 2.85% three-year notes priced with a 60 bps over Treasuries spread. These notes priced at 99.946 to yield 2.869%.
The company sold $3 billion of 3% five-year notes at an 80 bps over Treasuries spread. These notes priced at 99.618 to yield 3.083%.
A $3 billion tranche of 3.3% seven-year notes prices with a Treasuries plus 95 bps spread. These notes priced at 99.814 to yield 3.33%.
IBM brought $3.25 billion of 3.5% 10-year notes to the primary market at a spread of 105 bps over Treasuries. These notes priced at 99.749 to yield 3.53%.
A $2 billion tranche of 4.15% 20-year notes priced at a spread of 130 bps over Treasuries. These notes priced at 99.529 to yield 4.185%.
In the final tranche, the company sold $3 billion of 4.25% 30-year notes at a spread of 145 bps over Treasuries. These notes priced at 98.581 to yield 4.335%.
J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC, BNP Paribas Securities Corp., Citigroup Global Markets Inc., MUFG, BofA Merrill Lynch and Mizuho Securities USA Inc. were the active bookrunners.
Barclays, HSBC Securities (USA) Inc., RBC Capital Markets LLC, Santander Investment Securities Inc., SMBC Nikko Securities America, Inc., Wells Fargo Securities LLC, Commerzbank Capital Markets Corp., Deutsche Bank Securities Inc., TD Securities (USA) LLC, UniCredit Capital Markets LLC, Credit Suisse Securities (USA) LLC, ING Financial Markets LLC, SG Americas Securities LLC and U.S. Bancorp Investments Inc. were passive bookrunners.
Proceeds will be used to acquire Red Hat, Inc. and for general corporate purposes.
The company is an information technology and computer company based in Armonk, N.Y.
| Issuer: | International Business Machines Corp.
|
| Amount: | $20 billion
|
| Description: | Notes
|
| Bookrunners: | J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC, BNP Paribas Securities Corp., Citigroup Global Markets Inc., MUFG, BofA Merrill Lynch and Mizuho Securities USA Inc. (active), Barclays, HSBC Securities (USA) Inc., RBC Capital Markets LLC, Santander Investment Securities Inc., SMBC Nikko Securities America, Inc., Wells Fargo Securities LLC, Commerzbank Capital Markets Corp., Deutsche Bank Securities Inc., TD Securities (USA) LLC, UniCredit Capital Markets LLC, Credit Suisse Securities (USA) LLC, ING Financial Markets LLC, SG Americas Securities LLC and U.S. Bancorp Investments Inc.
|
| Co-managers: | Loop Capital Markets LLC, Banco Bradesco BBI SA, Lloyds Securities Inc., Scotia Capital (USA) Inc., ANZ Securities, Inc., BBVA Securities Inc., CIBC World Markets Corp., Danske Markets Inc., PNC Capital Markets LLC, RB International Markets (USA) LLC, Standard Chartered Bank, Williams Capital Group LP, Academy Securities, Inc., Drexel Hamilton, LLC, Samuel A. Ramirez & Co. Inc. and Siebert Capital Markets
|
| Trade date: | May 8
|
| Settlement date: | May 15
|
| Ratings: | Moody’s: A1
|
| S&P: A
|
| Fitch: A
|
| Distribution: | SEC registered
|
|
|
| Two-year floaters
|
| Amount: | $1.5 billion
|
| Maturity: | May 13, 2021
|
| Coupon: | Libor plus 40 bps
|
| Price: | Par
|
| Yield: | Libor plus 40 bps
|
| Call: | Non-callable
|
|
|
| Two-year notes
|
| Amount: | $1.5 billion
|
| Maturity: | May 13, 2021
|
| Coupon: | 2.8%
|
| Price: | 99.994
|
| Yield: | 2.803%
|
| Spread: | Treasuries plus 50 bps
|
| Call: | Greater of a make-whole call at Treasuries plus 10 bps and a par call
|
|
|
| Three-year notes
|
| Amount: | $2.75 billion
|
| Maturity: | May 15, 2022
|
| Coupon: | 2.85%
|
| Price: | 99.946
|
| Yield: | 2.869%
|
| Spread: | Treasuries plus 60 bps
|
| Call: | Greater of a make-whole call at Treasuries plus 10 bps and a par call
|
|
|
| Five-year notes
|
| Amount: | $3 billion
|
| Maturity: | May 15, 2024
|
| Coupon: | 3%
|
| Price: | 99.618
|
| Yield: | 3.083%
|
| Spread: | Treasuries plus 80 bps
|
| Call: | Greater of a make-whole call at Treasuries plus 15 bps and a par call
|
|
|
| Seven-year notes
|
| Amount: | $3 billion
|
| Maturity: | May 15, 2026
|
| Coupon: | 3.3%
|
| Price: | 99.814
|
| Yield: | 3.33%
|
| Spread: | Treasuries plus 95 bps
|
| Call: | Greater of a make-whole call at Treasuries plus 15 bps and a par call
|
|
|
| 10-year notes
|
| Amount: | $3.25 billion
|
| Maturity: | May 15, 2029
|
| Coupon: | 3.5%
|
| Price: | 99.749
|
| Yield: | 3.53%
|
| Spread: | Treasuries plus 105 bps
|
| Call: | Greater of a make-whole call at Treasuries plus 20 bps and a par call
|
|
|
| 20-year notes
|
| Amount: | $2 billion
|
| Maturity: | May 15, 2039
|
| Coupon: | 4.15%
|
| Price: | 99.529
|
| Yield: | 4.185%
|
| Spread: | Treasuries plus 130 bps
|
| Call: | Greater of a make-whole call at Treasuries plus 20 bps and a par call
|
|
|
| 30-year notes
|
| Amount: | $3 billion
|
| Maturity: | May 15, 2049
|
| Coupon: | 4.25%
|
| Price: | 98.581
|
| Yield: | 4.335%
|
| Spread: | Treasuries plus 145 bps
|
| Call: | Greater of a make-whole call at Treasuries plus 25 bps and a par call
|
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