8-KMaterial Agreements

INTERNATIONAL BUSINESS MACHINES CORP 8-K Report, Agreement Terminated (May 17, 2019)

Filed May 17, 2019For Securities:IBM

Summary

This 8-K filing from IBM on May 17, 2019, primarily relates to the financing for its previously announced acquisition of Red Hat. The company reports the successful completion of a $20 billion multi-tranche debt offering on May 15, 2019. The proceeds from this debt offering were used to fund the consideration for the Red Hat acquisition, which was announced on October 28, 2018. Following the successful debt offering, IBM has terminated its commitment letter for a $20 billion bridge term loan facility with its commitment parties. Importantly, the filing notes that there are no early termination penalties associated with this termination. This action signals a critical step forward in the financing structure for the significant Red Hat acquisition.

Key Highlights

  • 1IBM successfully closed a $20 billion multi-tranche debt offering on May 15, 2019.
  • 2The proceeds from the debt offering are intended to fund the acquisition of Red Hat.
  • 3IBM has terminated its commitment letter for a $20 billion bridge term loan facility.
  • 4The termination of the bridge loan commitment occurred on May 15, 2019.
  • 5No early termination penalties are associated with the termination of the bridge loan commitment letter.
  • 6This filing is an update regarding the financing aspect of the Red Hat acquisition.

Frequently Asked Questions

The main purpose of this filing is to report on IBM's successful completion of a $20 billion debt offering and the subsequent termination of its bridge loan commitment, both related to the financing of the Red Hat acquisition.

IBM raised $20 billion in principal amount through a multi-tranche debt offering.

The proceeds from the $20 billion debt offering were used to fund the consideration for the acquisition of Red Hat, Inc.

No, the filing explicitly states that there are no early termination penalties associated with the termination of the commitment letter for the bridge term loan facility.