International Business Machines Corp. is planning to sell itssecond U.S. dollar-denominated debt offering this year, as yieldsin the corporate bond market reach record lows.

IBM may sell three-year notes at a relative yield of about 45 to47 basis points more than similar-maturity Treasuries, andseven-year bonds in the 70 basis points area, said a personfamiliar with the offering who declined to be identified becauseterms aren't set. A basis point is 0.01 percentage point.

In February, when IBM last issued dollar-denominated debt, itgot a record-low coupon on three-year notes, selling $1.5 billionof 0.55 percent securities, at 42 basis points more thanTreasuries, according to data compiled by Bloomberg.

The world's biggest computer-services provider will use theproceeds for general corporate purposes, which could include debtrepayments, preferred stock redemptions, possible acquisitions orexpansion, according to a filing dated today.

The bonds, which are SEC registered, are expected to be ratedAa3 by Moody's Investors Service and A+ by Standard & Poor's,the person said. Barclays Plc, HSBC Holdings Plc, JPMorgan Chase& Co., and Royal Bank of Scotland Group Plc are managing thesale. The transaction will be of benchmark size, typically at least$500 million, the person said.

IBM is offering bonds as company borrowing costs have reachedrecord lows. Investment-grade corporate bond yields fell to 3.340percent May 4, the least in data going back to 1986, according tothe Bank of America Merrill Lynch U.S. Corporate Master Index.

In February, the Armonk, New York-based company also sold $1billion of 1.25 percent, five-year bonds, at a 62 basis pointsspread, Bloomberg data show.

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