Some IBM Corp. bonds widened yesterday after Big Blue announced plans to cut 25,000 jobs, trim manufacturing capacity, and take a $6 billion charge.

Phil Kazlowski, head of corporate trading at Citicorp Securities Markets Inc., said the 7 1/4% IBM notes due Nov. 15, 2002, which were priced in October at a 55 basis points spread over comparable Treasuries, were bid at 75 and offered at 70 yesterday. Last Wednesday, the notes were bid at 60 and offered at 58, he said.

"This is as wide as IBM has ever been in the 10-year sector forever," Kazlowski said. "It's basically lined up with the middle to lower [end] of the single-A industrial market."

Nick Riccio, a Standard & Poor's Corp. managing director, added, surprised by the numbers thrown out on this, and when people are surprised, they don't react favorably."

IBM's stock closed 6 3/4 points lower yesterday at 56 1/8, a New York Stock Exchange spokesman said.

IBM said yesterday's actions will help the company improve efficiency while speeding its shift to services, software, client server computing, and other growth areas.

"The actions we are announcing today demonstrate IBM's continuing resolve to deal aggressively with the difficult transition that is occurring in the computer industry," IBM chairman John F. Akers said in a release. "The result will be a stronger and more prosperous IBM."

To cover the cost of cutting 25,000 jobs worldwide in 1993 and continuing to prune its global manufacturing capacity, IBM said it plans to take a charge of about $6 billion in the fourth quarter.

"Declining hardware volumes coupled with rapid improvements in technology and productivity have reduced our capacity requirements," Akers said. "At the same time, our services and software businesses are showing excellent growth. We are continuing to move aggressively into these areas while maintaining a sharp focus on our unique ability to create value for our customers by integrating the industry's widest and most competitive choices of services, products, and technologies."

The company said it is also further increasing the autonomy of its ADSTAR, Pennant Systems, and Personal Computer Co. to help those businesses move faster to meet quickly changing marketplace requirements.

"We are moving ahead to manage these businesses as essentially self-sufficient companies, with the expectation that they will accelerate their speed to market and improve their efficiency and financial returns," Akers said.

IBM said the 1993 work-force cuts will come from manufacturing and development organizations, and in marketing and services units, principally from support areas.

"The general managers of our businesses will lead this work, which will occur business by business, location by location, and skill by skill," Akers said. "We expect them to make every reasonable effort to achieve the necessary reductions through voluntary means. If current business conditions do not improve significantly, however, it is likely that some business units will be unable to maintain full employment in 1993."

Capacity reduction will be concentrated in the company's technology products, enterprise systems, and ADSTAR businesses.

Cost and expense reductions will be focused on capital spending, development, sales, and general and administrative expenses.

IBM expects development spending to be reduced by $1 billion in 1993. Capital spending, which was slashed by about $1 billion in 1992, will continue to be cut in 1993. The company also expects sales, general, and administrative expenses to drop by about $1 billion next year.

IBM also said it anticipates that fourth-quarter results from operations should fall below analysts' expectations and be in the "break-even range."

Following IBM's announcement yesterday, Moody's Investors Service placed the long-term debt of IBM and wholly owned subsidiaries IBM Credit Corp. and IBM International Finance NV under review for a possible downgrade.

Those entities' Prime-1 ratings for short-term debt were unaffected, according to a Moody's release.

Ratings under review are:

* IBM Corp.'s Aa2 senior debt, Aa3 convertible subordinated debt, and (P)Aa2 shelf registration;

* IBM Credit's Aa2 senior debt and (P)AA2 shelf registration; and

* IBM International Finance's Aa2 senior debt.

"Moody's rating was triggered by IBM's announcement today that it is taking a charge of approximately $6 billion in the fourth quarter of 1992 to cover further work force and capacity reductions," the release says. "This charge is in addition to one for $2.9 billion announced by the company in its third quarter."

The total impact of those announced charges will cut IBM's fourth quarter results by approximately $7 billion pre-tax, the agency added.

Standard & Poor's put IBM Corp.'s AAA rating on CreditWatch for a possible downgrade on Dec. 9. The AAA ratings of IBM Credit, IBM International, and IBM Japan were also targeted for review then. However, IBM and IBM Credit's A-1-plus commercial paper was affirmed.

Standard & Poor's Riccio said a "significant chance exists" that a downgrade will occur, but just how low the rating will drop will hinge on what the company's prospects are for 1993 and how successful it is in carrying out its turnaround plans.

"The fourth quarter is definitely worse than we expected," he said.

In other news yesterday, a syndicate led by Lehman Brothers submitted the winning bid for the Tennessee Valley Authority's $1 billion offering of 30-year power bonds yesterday.

The syndicate also included First Tennessee Bank, a TVA release says. The 7.75% bonds were priced at 98.172, to yield 7.91%, or 45 basis points over comparable Treasuries. The cost to the TVA was 97.619. The TVA can call the bonds after five years at 104, moving to par in the 25th year.

William F. Malec, the agency's chief financial officer, said in the release that the TVA decided to come to market now because it is a historic time for financing 30-year call paper.

"There have only been two other periods since 1975 during which corporations have been able to secure an all-in debt cost at about 8% for 30-year bonds with five-year call provisions," he said. "The first time was a brief period during 1977, and then later between 1986 and 1987 for a more extended period."

New Issues

In secondary trading yesterday, spreads on high-grade issues continued largely unchanged with some slight tightening among industrials. High-yield bonds ended unchanged in light activity.

Union Electric Co. issued a two-part first mortgage bond offering totaling $170 million. The first tranche consisted of $85 million of 7.375% bonds due 2004. The noncallable bonds were priced at 99.66 to yield 7.418% or 60 basis points over comparable Treasuries. The second consisted of $85 million of 8% bonds due 2022. Noncallable for 10 years, the bonds were priced at 98.766 to yield 8.11%, or 65 basis points over comparable Treasuries. Moody's rates the offering A1, while Standard & Poor's rates it AA-minus. Salomon Brothers Inc. lead-managed the offering.

Bank of New York Delaware issued $150 million of 4.125% bank notes due 1993. The notes were priced at 99.925 to yield 4.202% or 42 basis points over comparable Treasuries. Moody's rates the offering A1, while Standard & Poor's rates it A. Merrill Lynch & Co. managed the offering.

Shearson Lehman Brothers Holdings issued $150 million of floating rate medium-term notes due 1994 at par. The noncallable notes float quarterly at 5/8 over the three-month London Interbank Offered Rate. Moody's rates the offering A3, while Standard & Poor's rates it A. Lehman Brothers managed the offering.

Consolidated Edison issued $100 million of 8.05% debentures due 2027. Noncallable for five years, the debentures were priced at 98.617 to yield 8.17% or 72 basis points over 30-year Treasuries. Moody's rates the offering Aa2, while Standard & Poor's rates it AA-minus, Goldman, Sachs & Co. sole-managed the offering.

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