International Business Machines Corp. sold $1.5 billion of debt in its second U.S. dollar-denominated offering this year, as corporate bond yields reach record lows.
IBM priced $900 million of 0.75 percent, three-year notes at a relative yield of 45 basis points more than similar-maturity Treasuries, and $600 million of 1.875 percent, seven-year bonds at a 65 basis-points spread, according to data compiled by Bloomberg. A basis point is 0.01 percentage point.
In February, when IBM last issued dollar-denominated debt, it obtained a record-low coupon on three-year notes, selling $1.5 billion of 0.55 percent securities at 42 basis points more than Treasuries, Bloomberg data show.
The world’s biggest computer-services provider will use the proceeds for general corporate purposes, which could include debt repayments, preferred stock redemptions, possible acquisitions or expansion, according to a filing dated today.
The bonds, which are SEC registered, are expected to be rated Aa3 by Moody’s Investors Service, Bloomberg data show. Barclays Plc, HSBC Holdings Plc, JPMorgan Chase & Co., and Royal Bank of Scotland Group Plc managed the sale.
IBM is offering bonds as company borrowing costs have reached record lows. Investment-grade corporate bond yields fell to 3.340 percent May 4, the least in data going back to 1986, according to the Bank of America Merrill Lynch U.S. Corporate Master Index.
In February, the Armonk, New York-based company sold $1 billion of 1.25 percent, five-year bonds, at a 62-basis-point spread, Bloomberg data show.