IBM 10-Yrs at Record Low Coupon

$1 billion of debt sold at 1.875% coupon, yielding 65 basis points over Treasuries.

International Business Machines Corp. sold $1 billion of 10-year bonds at 1.875 percent, the lowest coupon on record for dollar-denominated debt of that maturity.

The world’s largest computer-services provider obtained a relative yield of 65 basis points more than similar-maturity Treasuries, according to data compiled by Bloomberg. The coupon beat the previous 2 percent record held by 3M Co.’s 10-year notes sold on June 21. A basis point is 0.01 percentage point.

IBM also shares the record low with Sysco Corp. for three-year debt with its 0.55 percent bonds due February 2015.

The new debt may be rated Aa3, the fourth-highest level of investment grade, by Moody’s Investors Service. Proceeds will go toward general corporate purposes, according to a person familiar with the transaction, who asked not to be identified because the terms are private.

IBM last sold 10-year bonds in October 2011, issuing $500 million of 2.9 percent debt to yield 62.5 basis points more than benchmarks, Bloomberg data show. The Armonk, New York-based company’s securities traded at 108.34 cents on the dollar to yield 1.91 percent on July 19, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

BNP Paribas SA, Citigroup Inc., Deutsche Bank AG and UBS AG managed the sale, according to Bloomberg data.

 

Bloomberg News

 

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