Rule 424(b)(3)
Registration No. 333-37034
PRICING SUPPLEMENT NO. 6
TO PROSPECTUS DATED June 20, 2000
(As supplemented June 22, 2000)
INTERNATIONAL BUSINESS MACHINES CORPORATION
MEDIUM-TERM NOTES
(Fixed Rate Note)
(Due from one year to 30 years from date of
issue)
Designation: 4.375% Notes due June 1, 2009
Original Issue Date: May 28, 2004
Principal Amount: $100,000,000
Interest Rate: 4.375% per annum, accruing from
May 25, 2004
Maturity Date: June 1, 2009
Issue Price (as a percentage of Principal
Amount): 99.621% plus accrued interest from
May 25, 2004
Commission or Discount (as a percentage of
Principal Amount): 0.25%
Interest Payment Dates: Semi-Annual on June 1
and December 1, beginning December 1, 2004
Regular Record Dates: Fifteenth calendar day,
whether or not a Business Day prior to the
corresponding Interest Payment Date.
CUSIP: 459 20Q ES9
Redemption Provisions: see below
Form: [X] Book-Entry
[ ] Certificated
INTRODUCTION
This is a Pricing Supplement. It describes
the Fixed Rate Notes being issued under the
Medium Note Program of International Business
Machines Corporation (the "Company" or "IBM").
This document adds to, or 'supplements' the
description of the Notes referred to in the
accompanying Prospectus Supplement and
Prospectus. It does so by providing specific
pricing and other information about the Notes
issued in this particular transaction. This
Pricing Supplement also amends the Prospectus
Supplement and Prospectus to the extent that
the description of the Notes in this Pricing
Supplement is different from the terms which
are set forth in the Prospectus Supplement and
Prospectus.
REOPENING
On May 25, 2004, the Company issued
$500,000,000 aggregate principal amount of
4.375% Notes due June 1, 2009 under Pricing
Supplement Number 5, utilizing the same CUSIP
number. The Notes now offered under this
Pricing Supplement Number 6, together with the
Company's outstanding 4.375% Notes Due June 1,
2009 under Pricing Supplement Number 5, will
have the same interest rate, interest payment
dates, record dates and maturity date. The
total aggregate principal amount outstanding of
the Company's 4.375% Notes Due June 1, 2009
following issuance under this Pricing
Supplement will be $600,000,000. The Company
reserves the right to issue additional debt
securities that have the same interest rate,
interest payment dates, record dates and
maturity date as the Notes.
INTEREST
The Notes will bear interest from May 25,
2004. Interest on the Notes will be calculated
based on a year of 360 days consisting of 12
months of 30 days each.
If any payment of principal or interest is
due on a day that is not a Business Day, that
payment may be made on the next day which is a
Business Day. No additional interest will
accrue as a result of the delay in payment. For
purposes of this offering, the term "Business
Day" means each day on which commercial banks
settle payments in The City of New York. We
have capitalized a number of terms in this
document. If you do not see a definition for
those terms in this document, those terms will
have the meanings which we have already given
to them in the Prospectus Supplement and the
Prospectus.
OPTIONAL REDEMPTION BY IBM
The Notes will be redeemable, as a
whole or in part, at IBM's option, at any time
or from time to time, on at least 30 days, but
not more than 60 days, prior notice to holders
of the Notes at a redemption price equal to the
greater of:
- 100% of the principal amount of the
Notes to be redeemed, plus accrued
interest, if any, to the redemption date;
or
- the sum of the present values of the
Remaining Scheduled Payments, as defined
below, discounted, on a semiannual basis,
assuming a 360-day year consisting of
twelve 30-day months, at the Treasury
Rate, as defined below, plus 12.5 basis
points plus accrued interest to the date
of redemption which has not been paid.
"Treasury Rate" means, with respect to
any redemption date for the Notes:
- the yield, under the heading which
represents the average for the immediately
preceding week, appearing in the most
recently published statistical release
designated "H.15(519)" or any successor
publication which is published weekly by
the Board of Governors of the Federal
Reserve System and which establishes
yields on actively traded United States
Treasury securities adjusted to constant
maturity under the caption "Treasury
Constant Maturities," for the maturity
corresponding to the Comparable Treasury
Issue; provided that if no maturity is
within three months before or after the
maturity date for the Notes, yields for
the two published maturities most closely
corresponding to the Comparable Treasury
Issue will be determined and the Treasury
Rate will be interpolated or extrapolated
from those yields on a straight line basis
rounding to the nearest month; or
- if that release, or any successor
release, is not published during the week
preceding the calculation date or does not
contain such yields, the rate per annum
equal to the semiannual equivalent yield
to maturity of the Comparable Treasury
Issue, calculated using a price for the
Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal
to the Comparable Treasury Price for that
redemption date.
The Treasury Rate will be calculated on
the third business day preceding the redemption
date.
"Comparable Treasury Issue" means the
United States Treasury security selected by an
Independent Investment Banker as having a
maturity comparable to the remaining term of
the Notes to be redeemed that would be
utilized, at the time of selection and in
accordance with customary financial practice,
in pricing new issues of corporate debt
securities of comparable maturity to the
remaining term of such Notes.
"Independent Investment Banker" means
one of the Reference Treasury Dealers, to be
appointed by IBM.
"Comparable Treasury Price" means, with
respect to any redemption date for the Notes:
- the average of four Reference Treasury
Dealer Quotations for that redemption
date, after excluding the highest and
lowest of such Reference Treasury Dealer
Quotations; or
- if the trustee obtains fewer than four
Reference Treasury Dealer Quotations, the
average of all quotations obtained by the
trustee.
"Reference Treasury Dealer Quotations"
means, with respect to each Reference Treasury
Dealer and any redemption date, the average, as
determined by the trustee, of the bid and asked
prices for the Comparable Treasury Issue,
expressed in each case as a percentage of its
principal amount, quoted in writing to the
trustee by such Reference Treasury Dealer at
3:30 p.m., New York City time on the third
business day preceding such redemption date.
"Reference Treasury Dealer" means each
of Morgan Stanley & Co. Incorporated, UBS
Securities LLC, Lehman Brothers Inc., and one
other treasury dealer selected by IBM, and
their respective successors; provided, however,
that if any of the foregoing shall cease to be
a primary U.S. Government securities dealer,
which we refer to as a "Primary Treasury
Dealer," IBM will substitute another nationally
recognized investment banking firm that is a
Primary Treasury Dealer.
"Remaining Scheduled Payments" means,
with respect to each Note to be redeemed, the
remaining scheduled payments of the principal
thereof and interest thereon that would be due
after the related redemption date but for such
redemption; provided, however, that, if such
redemption date is not an interest payment date
with respect to such Note, the amount of the
next succeeding scheduled interest payment
thereon will be deemed to be reduced by the
amount of interest accrued thereon to such
redemption date.
On and after the redemption date,
interest will cease to accrue on the Notes or
any portion thereof called for redemption,
unless IBM defaults in the payment of the
redemption price and accrued interest. On or
before the redemption date, IBM will deposit
with the trustee money sufficient to pay the
redemption price of and accrued interest on the
Notes to be redeemed on such date. If less than
all of the Notes are to be redeemed, the Notes
to be redeemed shall be selected by the trustee
by such method as the trustee shall deem fair
and appropriate.
PLAN OF DISTRIBUTION
We have entered into a purchase agreement
with the following dealers, under which each
dealer has agreed to purchase the principal
amount of Notes listed:
Morgan Stanley & Co. Incorporated: $50,000,000
UBS Securities LLC: $50,000,000
Total: $100,000,000
These dealers will initially offer the
Notes at the Issue Price set forth in the
Pricing Supplement. Thereafter, they may
change the offering price and other selling
terms. The dealers named above have also
agreed to reimburse us for certain of our
expenses.
Dated: May 25, 2004