IBM · 10-Q · 2026Q3 · Full report

Interest Rate Exposure

INTERNATIONAL BUSINESS MACHINES CORP · 2026-10-22 · Importance 61 · Surprise 32

IBM had $65.0 billion of debt and finance lease obligations at September 30, 2026, up from $62.3 billion at December 31, 2025, with stated debt coupons and weighted-average rates ranging from below 1% to approximately 8%. The company issued $3.25 billion of U.S. dollar fixed-rate notes, $3.3 billion of euro fixed-rate notes, and $0.9 billion of euro floating-rate notes on February 3, 2026, followed by Canadian-dollar fixed-rate notes on August 17, 2026. Interest-rate swaps had a $6.7 billion notional amount at September 30, 2026 and converted selected fixed-rate debt into variable-rate debt to manage mismatches and overall financing costs. IBM also maintained $10.0 billion of revolving credit agreements, maturing in 2029 and 2031, with no borrowings outstanding at quarter-end.

Key facts

• The credit facilities include a covenant on the company’s consolidated net interest expense ratio, which cannot be less than 2.20 to 1.0. source
• Weighted-average remaining maturity of interest-rate swaps at September 30, 2026: approximately 2.7 years; at December 31, 2025: approximately 3.5 years. source
• For the nine months ended September 30, 2026, interest expense: $1,451 million; total interest paid and accrued: $1,774 million. source
• At both September 30, 2026 and December 31, 2025, the total notional amount of the company’s interest-rate swaps was $6.7 billion. source
• Cumulative hedging adjustments included in the carrying amount of long-term debt at September 30, 2026: $(5,261) million; at December 31, 2025: $(6,656) million. source
• Interest expense decreased $1 million year to year in the third quarter of 2026. source
• Interest expense decreased $6 million year to year in the first nine months of 2026. source