IBM Corp. is expected to price a two-part $1.5 billion offering this week, high-grade bond sources said yesterday.

The offering, expected to be done through Morgan Stanley & Co., is said to consist of a $1 billion seven-year piece and a $500 million 20-year portion. Both are expected to be noncallable. Comment on the offering could not be obtained from Morgan Stanley.

One trader at another firm said the 20-year piece will be popular.

"There's really no 20-year paper to compete with it," he said. He cited last month's Wal-Mart Stores Inc. offering, the 20-year portion of which enjoyed success.

"It's not as common as a 10 or a 30, but it's a regular financing tool," said Mike Bassett, a vice president at Stone & McCarthy Research Associates.

IBM spokesman Rob Wilson confirmed that the company was readying a debt offering, but declined to provide details until after the pricing.

Big Blue filed a shelf registration for 2.6 billion of debt and preferred equity on April 6, bring its available shelf securities to about $3 billion, Wilson said.

The $3 billion is part of a corporate financing package that IBM plans to execute over the next nine to 12 months, he said. The company already completed a $1.1 billion preferred stock offering on May 24.

IBM plans to use proceeds for general corporate purposes and to give the company financial flexibility in the event that more employees than expected opt for a severance package, Wilson said.

"It doesn't look as though 1993 is going to be a great year," said Nick Riccio, a managing director at Standard & Poor's Corp. "They'll probably lose money."

But after a modest loss this year, Riccio expects IBM to return to profitability in 1994. Job cuts are likely to continue, but they probably will not be on the scale of earlier layoffs, he said.

Standard & Poor's affirmed IBM's AA-minus rating senior debt last month, Riccio said. The rating has a negative outlook, however. The rating was cut to AA-minus from AAA on Jan 14.

Riccio said Standard & Poor's gave an A-plus rating to IBM's recently issued $1.1 billion of preferred stock from its shelf registration.

Riccio said that Standard & Poor's affirmed the rating based on IBM's "conservative" financial policy. The preferred stock issue is consistent with that, he said.

"It adds a little bit of equity; it gives them a little bit of extra cash," Riccio said.

The analyst, however, cited the negative outlook and said the rating could worsen if operating losses are greater than expected.

In secondary trading yesterday, spreads on high-grade bonds were mostly unchanged in quiet activity, though one trader noted some tightening in the triple-B area. High-yield issues were also quiet, finishing up 1/8 to 1/4.

New Issues

Westdeutsche Landesbank issued $500 million of 6.750% subordinated notes due 2005. The noncallable notes were priced at 99.715 to yield 6.785%, or 73 basis points over comparable Treasuries. Moody's Investors Service rates the offering Aa1, while Standard & Poor's rates it AA-plus. Goldman, Sachs & Co. was the lead manager for the offering.

Consolidated Edison issued $380 million of 7.5% debentures due 2023. Noncallable for 10 years, the debentures were priced at 99.045 to yield 7.581%, or 69 basis points over comparable Treasuries. Moody's rates it Aa2, while Standard & Poor's rates it AA-minus. Lehman Brothers was the lead manager.

Westdeutsche Landesbank issued $200 million of medium-term notes due 1994. The notes were priced initially at par to yield 3.75%. Moody's rates the offering Aa1, while Standard & Poor's rates it AA-plus. Morgan Stanley & Co. managed the offering.

Southern California Edison issued $150 million of first and refunding mortgage bonds due 1998. The noncallable bonds were priced at 99.049 to yield 5.671%, or 34 basis points above comparable Treasuries. Moody's rates the offering Aa3, while Standard & Poor's rates it A-plus. A group led by Merrill Lynch & Co. won competitive bidding to underwrite the offering.

Southern California Edison issued $125 million of first and refunding mortgage bonds due 2003. The noncallable bonds were priced at 98.327 to yield 6.48%. or 40 basis points more than comparable Treasuries. Moody's rates the offering Aa3, while Standard & Poor's rates it A-plus. A group led by Salomon Brothers Inc. won competitive bidding to underwrite the offering.

First Fidelity issued $150 million of 6.8% subordinated notes due 2003. The noncallable notes were priced at 99.534 to yield 6.865%, or 78 basis points over comparable Treasuries. Moody's rates the offering Baa1, while Standard & Poor's rates it BBB. Goldman Sachs was the lead manager.

Rating News

Standard & Poor's put Chrysler Corp. and related entities on CreditWatch for a possible upgrade.

"Chrylser's earnings and cash flow are significantly exceeding prior expectations, due largely to overwhelming success with new products and steps to enhance operating efficiency," Standard & Poor's said in a release.

Ratings that may be raised are:

Chrysler Corp.'s BB-plus senior debt and BB-minus preferred stock, Auburn Hills Trust BB-plus senior debt guaranteed by Chrysler Corp., Chrysler Financial Corp.'s BB-plus senior debt and BB-minus subordinated debt, and Chrysler Credit Canada Ltd.'s BB-plus senior debt guaranteed by Chrysler Credit Canada Ltd.

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