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IBM benefits from eager Eurobond market

It wasn't an opportunistic bond issue, but it easily could have been. IBM came to the market on Tuesday to refinance its only euro-denominated bond, and happened to catch investors at a peak in demand.

The bond priced at 10bp over the mid-swap rate, at the tight end of price guidance and a stretch better than other listed A-rated corporates ? the spread over the comparable Bund was 21bp, compared to 36bp for similarly rated companies.

The US tech company's only euro-denominated bond is a ?1 billion, five-year note due to mature in a month. The refinancing with a similar, five-year note was therefore investors' only chance to maintain exposure to this highly-rated brand name.

That and the excess liquidity in Europe at the moment led to high demand from retail investors, indicated by the 20% of orders coming from Swiss accounts.

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