Chemical Bank was picked to lead a $12 billion credit line for International Business Machines Corp., displacing Credit Suisse, IBM's existing agent bank.
In April, Credit Suisse led a $4.6 billion deal for the company. That line, much of which expires next spring, will be rolled into the new five-year revolving credit.
An IBM spokesman confirmed the selection of Chemical, but declined to elaborate o the reasons for the switch in lead banks.
"We made a competitive bid and have a very strong relationship with IBM," said a spokesman for Credit Suisse in New York.
New Finance Team
IBM recently installed a new finance team, led by chief financial officer Jerome York and treasurer Frederick Zuckerman.
Both men have close ties to Chemical, which probably contributed to the change in lead banks.
Mr. York joined IBM in May from Chrysler Corp., and Mr. Zuckerman had been treasurer of RJR Nabisco. Chemical is lead bank for both Chrysler and RJR.
Though staggering in size, the IBM credit will be only the second-largest corporate credit to hit the domestic loan market this year.
The largest deal was an $18 billion refinancing for General Motors Corp. and its finance arm.
Chemical orchestrated the syndication of the high-profile GM deal, which may be another reason why it got the nod to lead the IBM credit.
Terms of the credit are still being worked out, according to the IBM spokesman.
It's been known for weeks that IBM was talking with a number of banks about a new credit line, though the figure that had been floating around the market was $10 billion, not $12 billion.
Lines to Be Consolidated
The revolving credit will consolidate IBM'S existing worldwide credit lines, including the $4.6 billion line obtained in April.
Locking in a single, multiyear facility gives IBM some breathing room with its banks at a time when the company is under enormous financial pressures, stemming from the cost of massive layoffs.
In a sign of the company's sagging fortunes. IBM'S debt rating this year has fallen from triple-A to A.
For all its problems, though, the IBM name is a big draw in the loan market, and the syndication he new credit is likely to be a lay-up for Chemical.