http://www.businesswire.com/news/home/20091106005465/en
ARMONK, N.Y.--(Business Wire)--
IBM (NYSE: IBM) today announced that it has commenced offers to exchange (the
"exchange offers") any and all of its 7.125 percent debentures due 2096, 7.000
percent debentures due 2045 and 8.000 percent notes due 2038 for a new series of
5.600 percent senior notes due 2039 (the "new notes") and cash. To encourage
holders to tender early, IBM is offering an early exchange premium to holders
who validly tender their old notes before 5:00 p.m. EST, on Friday, November 20,
2009 (the "early exchange date"). The exchange offers expire at 12:00 a.m. EST,
on Monday, December 7, 2009 (the "expiration date"). We are conducting the
exchange offers to retire high coupon long-dated debt in a favorable interest
rate environment. The terms and conditions of the exchange offers are described
in IBM`s exchange circular dated November 6, 2009 (the "exchange circular").
The new notes will mature on November 30, 2039 and will bear interest from
November 30, 2009, the early settlement date, at a rate per annum of 5.600
percent. The new notes will be unsecured senior obligations of IBM and will rank
equally with all of IBM`s other unsecured senior indebtedness.
IBM is offering to exchange its 7.125 percent debentures due December 1, 2096
(CUSIP No. 459200 AP 6) (the "7.125 percent notes"), its 7.000 percent
debentures due October 30, 2045 (CUSIP No. 459200 AN 1) (the "7.000 percent
notes") and its 8.000 percent notes due October 15, 2038 (CUSIP No. 459200 GL
9)(the "8.000 percent notes," and together with the 7.125 percent notes and the
7.000 percent notes, the "old notes") for new notes and cash in the amounts
described below.
Old Notes Maturity Date Principal Amount Outstanding Early Exchange Consideration(1)(2) Early Exchange Premium(1) Late Exchange Consideration(1)
7.125% Notes December 1, 2096 $850,000,000 $1,000 principal amount of New Notes and a cash amount of $259.01 $30 principal amount of New Notes $970 principal amount of New Notes and a cash amount of $259.01
7.000% Notes October 30, 2045 $150,000,000 $1,000 principal amount of New Notes and a cash amount of $224.62 $20 principal amount of New Notes $980 principal amount of New Notes and a cash amount of $224.62
8.000% Notes October 15, 2038 $1,000,000,000 $1,100 principal amount of New Notes and a cash amount of $268.74 $30 principal amount of New Notes $1,070 principal amount of New Notes and a cash amount of $268.74
___________________________
(1) For each $1,000 principal amount of Old Notes.
(2) Includes Early Exchange Premium.
IBM will also pay accrued and unpaid interest in cash on the old notes accepted
in the exchange offers to, but not including, the applicable settlement date
minus, in the case of the final settlement date, accrued and unpaid interest on
the new notes to, but not including, the final settlement date. Subject to
applicable law, IBM has the right in its absolute discretion to waive, modify,
extend, amend, terminate or withdraw the exchange offers with respect to each
series of old notes and to extend the early exchange date, the expiration date
or any related dates for any of the exchange offers.
IBM expects that holders who validly tender their old notes before the early
exchange date will receive their new notes and cash payments on Monday, November
30, 2009, and that holders who validly tender their old notes after the early
exchange date but before the expiration date will receive their new notes and
cash payments on Thursday, December 10, 2009.
The exchange offers are subject to the satisfaction or waiver of certain
conditions, including our ability to issue at least $500 million aggregate
principal amount of new notes in exchange for all old notes tendered and
accepted for exchange in order to complete any of the exchange offers at the
early exchange date or the expiration date. IBM is making each exchange offer
independently of the other exchange offers, and, except as described in this
paragraph, no exchange offer is conditioned upon completion of any other
exchange offer.
Global Bondholders Service Corporation is the exchange and information agent for
the exchange offers. Requests for copies of the exchange circular and questions
regarding the exchange offers may be directed to Global Bondholder Services
Corporation at (212) 430-6688. Credit Suisse Securities (USA) LLC, Deutsche Bank
Securities Inc. and J.P. Morgan Securities Inc. are the financial advisors for
the exchange offers.
This announcement is not an offer to exchange or a solicitation of an offer to
exchange with respect to any securities and is qualified in its entirety by
reference to the exchange circular. The exchange offers will be made solely
pursuant to the terms and conditions of the exchange circular.
Neither the United States Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or passed
upon the adequacy or accuracy of the exchange circular. Any representation to
the contrary is a criminal offense.
The exchange offers are not being made to, nor will IBM accept tenders of old
notes from, holders in any jurisdiction in which the exchange offers or the
acceptance thereof would not be in compliance with the securities or blue sky
laws of such jurisdiction.
The new notes have not been and will not be registered under the Securities Act
of 1933. IBM is making the exchange offers in reliance on the exemption from the
registration requirements of the Securities Act of 1933 afforded by Section
3(a)(9) thereof.
Except for the historical information and discussions contained herein and
therein, statements contained in this press release and the exchange circular
may constitute forward-looking statements. These statements involve a number of
risks, uncertainties and other factors that could cause actual results to differ
materially, including the following: a downturn in the economic environment and
corporate IT spending budgets; our failure to meet growth and productivity
objectives; a failure of our innovation initiatives; risks from investing in
growth opportunities; failure of our intellectual property portfolio to prevent
competitive offerings and our failure to obtain necessary licenses; breaches of
data protection; fluctuations in revenues and purchases; impact of local legal,
economic, political and health conditions; adverse effects from environmental
matters, tax matters and our pension plans; ineffective internal controls; our
use of accounting estimates; competitive conditions; our ability to attract and
retain key personnel and our reliance on critical skills; impact of
relationships with critical suppliers; currency fluctuations and customer
financing risks; impact of changes in market liquidity conditions and customer
credit risk on receivables; reliance on third party distribution channels; our
ability to successfully manage acquisitions and alliances; risk factors related
to IBM securities; and other risks, uncertainties and factors discussed in our
Form 10-Q, Form 10-K and in our other filings with the Securities and Exchange
Commission or in materials incorporated therein by reference. We assume no
obligation to update or revise any forward-looking statements.
IBM
Doug Shelton, 914/499-6533
doshelton@us.ibm.com
IBM
Doug Shelton, 914/499-6533
doshelton@us.ibm.com
Copyright Business Wire 2009
