IBM Announces Expiration and Results of Debt Ex...

IBM Announces Expiration and Results of Debt Exchange Offers

IBM

IBM (NYSE: IBM) today announced the expiration and final results of its offers to exchange (the “exchange offers”) any and all of its 7.125 percent debentures due 2096 (the “7.125 percent notes”), any and all of its 8.000 percent notes due 2038 (the “8.000 percent notes”) and up to $800,000,000.00 aggregate principal amount of its 5.600 percent notes due 2039 (the “5.600 percent notes” and together with the 7.125 percent notes and 8.000 percent notes, the “old notes”) for a new series of 4.00 percent notes due 2042 (the “new notes”) and cash. As of 12:00 midnight eastern time, on Monday, June 18, 2012 (the “expiration date”), approximately $5,698,000 of the 7.125 percent notes, $103,698,000 of the 8.000 percent notes and $846,672,000 of the 5.600 percent notes were tendered for exchange.

Because the aggregate principal amount of the 5.600 percent notes validly tendered exceeded $800,000,000.00, IBM will accept validly tendered 5.600 percent notes on a pro rata basis. IBM will accept the portion of each holder’s tendered 5.600 percent notes the principal amount of which is equal to the total principal amount of such tendered 5.600 percent notes multiplied by a fraction, the numerator of which is $800,000,000.00 and the denominator of which is $846,672,000 (the aggregate principal amount of 5.600 percent notes validly tendered), rounded downward to the nearest $1,000 principal amount.

Holders who validly tendered their old notes before the expiration date and whose old notes are accepted in the exchange offers will receive new notes and cash, in the amounts described below, on Wednesday, June 20, 2012 (the “settlement date”). An early exchange premium will be included for 8.000 percent notes and 5.600 percent notes that were tendered by 5:00 p.m. eastern time, on June 4, 2012 (the “early exchange date”).

Old Notes	Â	  Maturity Date	Â	Early Exchange Consideration(1)(2)	Â	Early Exchange Premium(1)	Â	Exchange Consideration(1)
7.125% Notes		December 1, 2096		N/A		N/A		$1,369.69 principal amount of New Notes and a cash amount of $200.00
									Â
8.000% Notes		October 15, 2038		$1,694.80 principal amount of New Notes		$40 principal amount of New Notes		$1,654.80 principal amount of New Notes
									Â
5.600% Notes		November 30, 2039		$1,155.07 principal amount of New Notes and a cash amount of $150.00		$40 principal amount of New Notes		$1,115.07 principal amount of New Notes and a cash amount of $150.00

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⁽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 settlement date. IBM will issue approximately $1,107,313,000 aggregate principal amount of new notes on the settlement date.

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 within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on our current assumptions regarding future business and financial performance. 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 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; cybersecurity and data privacy considerations; fluctuations in financial results 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; our ability to attract and retain key personnel and our reliance on critical skills; impacts of relationships with critical suppliers and business with government clients; 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 U.S. Securities and Exchange Commission (SEC) or in materials incorporated therein by reference. Any forward-looking statement in this press release or the exchange circular speaks only as of the date on which it is made. We assume no obligation to update or revise any forward-looking statements.

IBM Corporate Communications
Media:
Doug Shelton, 914-499-6533
[e-mail]
or
IBM Treasury Department
Investor:
Easwaran K. Venkatasubramanian, 914-499-6108
[e-mail]