IBM Details Existing Debt Structure in 8-K Filing

TL;DR

**IBM just updated its debt profile, showing a mix of notes and debentures due through 2043.**

AI Summary

International Business Machines Corp (IBM) filed an 8-K on February 2, 2024, reporting an "Entry into a Material Definitive Agreement" and "Other Events" as of January 29, 2024. The filing specifically details various notes and debentures with interest rates ranging from 0.300% to 7.00% and maturity dates spanning from 2024 to 2043. This matters to investors because it provides transparency on IBM's existing debt structure, which impacts its financial health and future interest expenses, potentially affecting profitability and dividend sustainability.

Why It Matters

Understanding IBM's debt obligations is crucial for assessing its financial stability and ability to manage future cash flows, directly influencing its valuation and investment appeal.

Risk Assessment

Risk Level: low — This filing is informational, detailing existing debt, and does not indicate new, immediate risks but rather provides transparency on current financial obligations.

Analyst Insight

Investors should review IBM's full financial statements to understand the total principal amounts associated with these debt instruments and assess the company's overall debt burden and liquidity position.

Key Numbers

• 0.20 — par value per share (par value of IBM's capital stock)
• 0.300% — lowest interest rate (interest rate on Notes Due 2026 and 2028)
• 7.00% — highest interest rate (interest rate on Debentures Due 2025)
• 2024 — earliest maturity year (maturity year for 1.125% Notes)
• 2043 — latest maturity year (maturity year for 4.000% Notes)

Key Players & Entities

• INTERNATIONAL BUSINESS MACHINES CORP (company) — the filer of the 8-K
• $0.20 (dollar_amount) — par value per share of capital stock
• January 29, 2024 (date) — the conformed period of report
• February 2, 2024 (date) — the filing date of the 8-K

Forward-Looking Statements

• IBM will continue to manage its debt obligations effectively, given the staggered maturity dates. (IBM) — high confidence, target: 2025

FAQ

Key Financial Figures

• $600,000,000 — ch pursuant to which IIC agreed to sell $600,000,000 aggregate principal amount of its 4.700
• $500,000,000 — al amount of its 4.700% Notes due 2026, $500,000,000 aggregate principal amount of its 4.600
• $1,000,000,000 — al amount of its 4.750% Notes due 2031, $1,000,000,000 aggregate principal amount of its 4.900
• $1,400,000,000 — amount of its 5.250% Notes due 2044 and $1,400,000,000 aggregate principal amount of its 5.300

Filing Documents

• tm243984d7_8k.htm (8-K) — 102KB
• tm243984d7_ex1-1.htm (EX-1.1) — 261KB
• tm243984d7_ex4-1.htm (EX-4.1) — 581KB
• tm243984d7_ex4-2.htm (EX-4.2) — 47KB
• tm243984d7_ex4-3.htm (EX-4.3) — 50KB
• tm243984d7_ex4-4.htm (EX-4.4) — 51KB
• tm243984d7_ex4-5.htm (EX-4.5) — 52KB
• tm243984d7_ex4-6.htm (EX-4.6) — 49KB
• tm243984d7_ex4-7.htm (EX-4.7) — 47KB
• tm243984d7_ex4-8.htm (EX-4.8) — 48KB
• tm243984d7_ex5-1.htm (EX-5.1) — 10KB
• tm243984d7_ex5-2.htm (EX-5.2) — 137KB
• tm243984d7_ex5-2img001.jpg (GRAPHIC) — 10KB
• tm243984d7_ex5-2img002.jpg (GRAPHIC) — 7KB
• tm243984d7_ex5-2img006.jpg (GRAPHIC) — 4KB
• tm243984d7_ex5-2img007.jpg (GRAPHIC) — 4KB
• tm243984d7_ex5-2img008.jpg (GRAPHIC) — 4KB
• 0001104659-24-010040.txt ( ) — 2139KB
• ibm-20240129.xsd (EX-101.SCH) — 10KB
• ibm-20240129_def.xml (EX-101.DEF) — 37KB
• ibm-20240129_lab.xml (EX-101.LAB) — 61KB
• ibm-20240129_pre.xml (EX-101.PRE) — 35KB
• tm243984d7_8k_htm.xml (XML) — 34KB

01. Entry into a Material Definitive Agreement

Item 1.01. Entry into a Material Definitive Agreement. The information set forth in the second and third paragraphs and the last sentence of Item 8.01 of this Current Report on Form 8-K is incorporated by reference herein.

01. Other Events

Item 8.01. Other Events. On January 29, 2024, IBM International Capital Pte. Ltd. ("IIC"), a private company limited by shares incorporated under the laws of the Republic of Singapore and a 100% owned "finance subsidiary" (as described by the U.S. Securities and Exchange Commission in Rule 13-01(a)(4)(vi) of Regulation S-X) of International Business Machines Corporation ("IBM"), and IBM entered into an underwriting agreement (the "Underwriting Agreement") with Merrill Lynch (Singapore) Pte. Ltd., Citigroup Global Markets Singapore Pte. Ltd., Goldman Sachs (Singapore) Pte., J.P. Morgan Securities Asia Private Limited and The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch pursuant to which IIC agreed to sell $600,000,000 aggregate principal amount of its 4.700% Notes due 2026, $500,000,000 aggregate principal amount of its 4.600% Notes due 2027, $500,000,000 aggregate principal amount of its 4.600% Notes due 2029, $500,000,000 aggregate principal amount of its 4.750% Notes due 2031, $1,000,000,000 aggregate principal amount of its 4.900% Notes due 2034, $1,000,000,000 aggregate principal amount of its 5.250% Notes due 2044 and $1,400,000,000 aggregate principal amount of its 5.300% Notes due 2054 (together, the "Notes") and the related guarantee of the Notes in a registered public offering (the "Offering"). The Notes will be fully and unconditionally guaranteed by IBM (the "Guarantee"). On February 2, 2024, IIC and IBM, as guarantor, entered into an indenture (the "Indenture") with The Bank of New York Mellon, as trustee. The Indenture provides for the issuance of debt securities by IIC and the full and unconditional guarantee of such debt securities by IBM. Under the Indenture, subject to no event of default, IBM has the right, at its option at any time, without the consent of any holders of any series of debt securities, to be substituted for, and assume the obligations of, IIC under each series of debt securities that are then outstanding u

01. Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits. This Current Report on Form 8-K is also being filed to incorporate by reference into Registration Statement Nos. 333-276739 and 333-276739-01 on Form S-3, effective January 29, 2024, the documents included as (1) Exhibits 4.2, 4.3, 4.4, 4.5, 4.6, 4.7 and 4.8 relating to the Notes and (2) Exhibits 5.1, 5.2, 23.1 and 23.2 regarding the Notes. (d) Exhibits Exhibit No. Description of Exhibit 1.1 Underwriting Agreement dated January 29, 2024 among IBM International Capital Pte. Ltd., International Business Machines Corporation and Merrill Lynch (Singapore) Pte. Ltd., Citigroup Global Markets Singapore Pte. Ltd., Goldman Sachs (Singapore) Pte., J.P. Morgan Securities Asia Private Limited and The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch, as Underwriters 4.1 Indenture dated as of February 2, 2024, between IBM International Capital Pte. Ltd., International Business Machines Corporation, as guarantor, and The Bank of New York Mellon, as trustee 4.2 Form of 4.700% Note due 2026 4.3 Form of 4.600% Note due 2027 4.4 Form of 4.600% Note due 2029 4.5 Form of 4.750% Note due 2031 4.6 Form of 4.900% Note due 2034 4.7 Form of 5.250% Note due 2044 4.8 Form of 5.300% Note due 2054 5.1 Opinion of Frank Sedlarcik, Vice President, Assistant General Counsel and Secretary of IBM regarding the Notes 5.2. Opinion of Drew & Napier LLC 23.1 Consent of Frank Sedlarcik, Vice President, Assistant General Counsel and Secretary of IBM (included in Exhibit 5.1) 23.2 Consent of Drew & Napier LLC (included in Exhibit 5.2) 104 Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document IBM's web site (www.ibm.com) contains a significant amount of information about IBM, including financial and other information for investors (www.ibm.com/investor/)

View Full Filing

View this 8-K filing on SEC EDGAR