IBM holders tender $1.43 billion of notes in exchange offer so far

By Angela McDaniels

Tacoma, Wash., Nov. 23 - International Business Machines Corp. had received tenders for $1,434,000,000 of notes as of 5 p.m. ET on Nov. 20, which was the early exchange date in an exchange offer that began on Nov. 6.

Specifically, holders had tendered $500 million of the company's $850 million of 7.125% debentures due Dec. 1, 2096, $123 million of its $150 million of 7% debentures due Oct. 30, 2045 and $811 million of its $1 billion of 8% notes due Oct. 15, 2038.

Settlement for these notes is expected to occur on Nov. 30.

The company is offering new 5.6% senior notes due Nov. 30, 2039 and cash.

For each $1,000 principal amount of 7.125% debentures, IBM will issue an equal amount of the new notes and pay $259.01 in cash. The exchange amount includes an early premium of $30.00 principal amount of new notes for each note tendered by the early exchange date.

For each $1,000 principal amount of 7% notes, IBM will issue an equal amount of the new notes, including an early premium of $20.00 principal amount of new notes, and pay $224.62 in cash.

For each $1,000 principal amount of 8% notes, IBM will issue $1,100 of the new notes, including an early premium of $30.00 principal amount of new notes, and pay $268.74 in cash.

Holders will also receive accrued interest.

The offer expires at midnight ET on Dec. 7, and the settlement date for notes tendered after the early exchange date will be Dec. 10.

IBM said it is conducting the exchange offer to retire high-coupon, long-dated debt in a favorable interest rate environment.

The exchange offer is subject to the satisfaction or waiver of certain conditions, including IBM's ability to issue at least $500 million of new notes in exchange for all old notes tendered and accepted.

Global Bondholder Services Corp. (212 430-6688) is the exchange and information agent. Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and J.P. Morgan Securities Inc. are the financial advisers for the exchange offer.

IBM, based in Armonk, N.Y., develops computer systems, software, storage systems and microelectronics.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.