IBM CREDIT LLC

$3,000,000,000

Debt Securities

$600,000,000  Floating Rate Notes due 2019

$600,000,000  Floating Rate Notes due 2021

$800,000,000 1.625% Notes due 2019

$500,000,000 1.800% Notes due 2021

$500,000,000  2.200% Notes due 2022

UNDERWRITING AGREEMENT

New York, New York

Dated as of September 5, 2017

To the Representatives named in Schedule I hereto
   of the Underwriters named in Schedule II hereto

Ladies and Gentlemen:

IBM Credit LLC, a Delaware limited liability company (the “Company”), proposes to sell to the underwriters named in Schedule II hereto (the “Underwriters”), for whom you are acting as representatives (the “Representatives”), the principal amount of its Securities identified in Schedule I hereto (the “Securities”), to be issued under an indenture to be dated as of September 8, 2017 (the “Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”). If the firm or firms listed in Schedule II hereto include only the firm or firms listed in Schedule I hereto, then the terms “Underwriters” and “Representatives”, as used herein shall each be deemed to refer to such firm or firms.

 

 

final prospectus supplement shall include all information required by the Act and the rules thereunder, and, except to the extent the Representatives shall agree in writing to a modification, shall be in all substantive respects in the form furnished to you prior to the Execution Time or, to the extent not completed at the Execution Time, shall contain only such specific additional information and other changes (beyond that contained in the Basic Prospectus and any Preliminary Final Prospectus) as the Company has advised you, prior to the Execution Time, will be included or made therein. If the Registration Statement contains the undertaking specified by Regulation S‑K Item 512(a), the Registration Statement, at the Execution Time, meets the requirements set forth in Rule 415(a)(1)(x).

The terms which follow, when used in this Agreement, shall have the meanings indicated. The term the “Effective Date” shall mean each date that the Registration Statement and any post-effective amendment or amendments thereto became or become effective. “Execution Time” shall mean the date and time that this Agreement is executed and delivered by the parties hereto. “Basic Prospectus” shall mean the basic prospectus relating to the Registration Statement to be used in connection with offering the Securities.  “Final Prospectus” shall mean the prospectus supplement relating to the Securities and containing the final terms of the Securities that is first filed pursuant to Rule 424(b) after the Execution Time, together with the Basic Prospectus. “Registration Statement” shall mean the registration statement referred to in the preceding paragraph, including incorporated documents, exhibits and financial statements and any prospectus supplement relating to the Securities that is filed with the Commission pursuant to Rule 424(b) and deemed part of such registration statement pursuant to Rule 430B, in the form in which it or they has or have or shall become effective and, in the event any post-effective amendment thereto becomes effective prior to the Closing Date (as hereinafter defined), shall also mean such registration statement or statements as so amended. “Rule 433”, “Rule 415”, “Rule 424”, “Rule 430B” and “Regulation S‑K” refer to such rules under the Act. “Disclosure Package” shall mean (i) the Basic Prospectus, as amended and supplemented (including any preliminary prospectus supplement issued before the Execution Time relating to the Securities) to the Execution Time, (ii) the Issuer Free Writing Prospectuses, if any, identified in Schedule III hereto, and (iii) any other Free Writing Prospectus that the parties hereto shall hereafter expressly agree in writing to treat as part of the Disclosure Package. “Free Writing Prospectus” shall mean a free writing prospectus, as defined in Rule 405.  “Issuer Free Writing Prospectus” shall mean an issuer free writing prospectus, as defined in Rule 433.  “Preliminary Final Prospectus” shall mean any preliminary prospectus supplement to the Basic Prospectus which describes the Securities and the offering thereof and is used prior to filing of the Final Prospectus, together with the Basic Prospectus. Any reference herein to the Registration Statement, a Preliminary Final Prospectus or the Final Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S‑3 which were filed under the Securities Exchange Act of 1934 (the “Exchange Act”) on or before the effective date of the Registration Statement or the date of such Preliminary Final Prospectus or the Final Prospectus, as the case may be; and any reference herein to the terms “amend”, “amendment” or “supplement” with respect to the Registration Statement, any Preliminary Final Prospectus or the Final Prospectus shall be deemed to refer to and include the filing of any document under the Exchange Act after the effective date of the Registration Statement, or the date of any Preliminary Final Prospectus or the Final Prospectus, as the case may be, deemed to be incorporated therein by reference.

 

 

 

 

 

 

The Company is advised by the Representatives that the Underwriters propose to make a public offering of their respective portions of the Securities as soon after the Registration Statement and this Agreement have become effective as in the Representatives’ judgment is advisable.  The Company is further advised by the Representatives that the Securities are to be offered to the public upon the terms set forth in the Final Prospectus.

 

 

of this Section 4, an amendment or supplement which will correct such statement or omission or an amendment which will effect such compliance.

 

 

Schedule III hereto.  Any such free writing prospectus consented to by the Representatives is hereinafter referred to as a “Permitted Free Writing Prospectus.”  The Company agrees that (x) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and (y) it has complied and will comply, as the case may be, with the requirements of Rules 164 and 433 applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the Commission, legending and record keeping.

(i)  the opinion of the General Counsel, an Assistant General Counsel, an Associate General Counsel or other senior counsel or attorney of the Company or its ultimate parent, International Business Machines Corporation, dated the Closing Date, to the effect that:

 

 

jurisdiction within the United States which requires such qualifications wherein it owns or leases material properties or conducts material business;

 

 

 

 

The statements described in one or more of paragraphs (B), (C), (E), (F), (G), (H) and (J) of this subsection 5(b)(i) may be omitted from the opinion of such counsel; provided, however, that in such event the Company shall also have furnished to the Representatives the corresponding opinion or letter of Cravath, Swaine & Moore LLP, counsel for the Company, described in subsection 5(b)(ii) or 5(b)(iii) immediately following.

(ii)   in the event that the statements described in one or more of paragraphs (B), (C), (E), (F) or (G) of foregoing subsection 5(b)(i) is omitted from the opinion delivered pursuant to such subsection, the opinion of Cravath, Swaine & Moore LLP, counsel for the Company, dated the Closing Date, to the effect of the statements so omitted.

In rendering such opinions, such counsel may rely (A) as to matters involving the application of laws other than the Limited Liability Company Act of the State of Delaware or of any jurisdiction other than the State of New York or the United States, to the extent they deem proper and specified in such opinion, upon the opinion of other counsel of good standing whom they believe to be reliable and who are satisfactory to counsel for the Underwriters; and (B) as to matters of fact, to the extent they deem proper, on certificates of responsible officers of the Company and public officials.

(iii)   in the event that the statements in paragraph (H) or (J) of subsection 5(b)(i) are omitted from the opinion provided pursuant to such subsection, a letter of Cravath, Swaine & Moore LLP dated the Closing Date to the effect that, having participated in conferences with certain officers of, and with the accountants for, the Company and having made certain inquiries and investigations in connection with the preparation of the Registration Statement, the Disclosure Package and the Final Prospectus, such counsel has no reason to believe that (i) the Registration Statement and the Final Prospectus (except the financial statements and the notes thereto and other information of an accounting or financial nature included therein, and the Statement of Eligibility (Form T‑1) included as an exhibit to the Registration Statement, as to which such counsel need express no view) were not appropriately responsive in all material respects with requirements of the Act and the applicable rules and regulations of the Commission thereunder or (ii) the Registration Statement at the Effective Date or the Execution Time contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, the Disclosure Package at the Execution Time contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or the Final Prospectus, either as of its date or on the Closing Date, includes any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which

 

 

they were made, not misleading (in each case except for the financial statements and the notes thereto and other information of an accounting or financial nature included therein, as to which such counsel need express no view).

(i)   the representations and warranties of the Company in this Agreement are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date;

(ii)   no stop order suspending the effectiveness of the Registration Statement, as amended, or any notice that would prevent its use has been issued and no proceedings for that purpose have been instituted or, to the Company’s knowledge, threatened; and

(iii)   since the date of the most recent financial statements included in the Disclosure Package or the Final Prospectus, there has been no material adverse change in the condition (financial or other), earnings, business or properties of the Company and its subsidiaries, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Disclosure Package and the Final Prospectus.

 

 

(i)   in their opinion the audited financial statements and schedules thereto included or incorporated in the Registration Statement, the Disclosure Package and the Final Prospectus and reported on by them comply as to form in all material respects with the applicable accounting requirements of the Exchange Act and the published rules and regulations thereunder with respect to financial statements and financial statement schedules included or incorporated in annual reports on Form 10-K under the Exchange Act;

(ii)   on the basis of a reading of the unaudited financial statements included or incorporated in the Registration Statement, the Disclosure Package and the Final Prospectus and of the latest unaudited financial statements made available by the Company and its subsidiaries; carrying out certain specified procedures (but not an examination in accordance with generally accepted auditing standards) which would not necessarily reveal matters of significance with respect to the comments set forth in such letter; a reading of the minutes of the meetings of the stockholders, directors and executive committees of the Company and the subsidiaries since the date of the latest audited balance sheet, through a specified date not more than five business days prior to the date of the letter; and inquiries of certain officials of the Company who have responsibility for financial and accounting matters of the Company and its subsidiaries as to transactions and events subsequent to the date of the most recent financial statements incorporated in the Registration Statement and the Final Prospectus, nothing came to their attention which caused them to believe that:

 

 

thereof unless said explanation is not deemed necessary by the Representatives; and

(iii)  they have performed certain other procedures as a result of which they determined that the information described in a schedule to be delivered on behalf of the Underwriters of an accounting, financial or statistical nature (which is limited to accounting, financial or statistical information derived from the general ledger of the Company) set forth in the Registration Statement, as amended, the Disclosure Package, the Final Prospectus, as amended or supplemented, and in Exhibit 12 to the Registration Statement (including selected accounting, financial or statistical information included or incorporated in the Company’s Annual Report on Form 10‑K incorporated in the Final Prospectus or any of the Company’s Quarterly Reports on Form 10‑Q incorporated therein), agrees with the general ledger of the Company and its subsidiaries, excluding any questions of legal interpretation

References to the Final Prospectus in this paragraph (e) include any supplements thereto at the date of the letter.

If any of the conditions specified in this Section 5 shall not have been fulfilled in all material respects when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be in all material respects reasonably satisfactory in form and substance to the Representatives and their counsel, this Agreement and all obligations of the Underwriters hereunder may be canceled at, or at any time prior to, the Closing Date by the Representatives. Notice of such cancelation shall be given to the Company in writing or by telephone or telegraph confirmed in writing.

 

 

 

 

be made against the indemnifying party under this Section 7, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise than under this Section 7. In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to appoint counsel satisfactory to such indemnified party to represent the indemnified party in such action; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to defend such action on behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to such indemnified party of its election so to appoint counsel to defend such action and approval by the indemnified party of counsel, the indemnifying party will not be liable to such indemnified party under this Section 7 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso to the next preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel (in addition to any local counsel), approved by the Representatives in the case of paragraph (a) of this Section 7, representing the indemnified parties under such paragraph (a) who are parties to such action), (ii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action or (iii) the indemnifying party has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party; and except that, if clause (i) or (iii) is applicable, such liability shall be only in respect of the counsel referred to in such clause (i) or (iii).

 

 

each case to clauses (y) and (z) of this paragraph (d). Any party entitled to contribution will, promptly after receipt of notice of commencement of any action, suit or proceeding against such party in respect of which a claim for contribution may be made against another party or parties under this paragraph (d), notify such party or parties from whom contribution may be sought, but the omission to so notify such party or parties shall not relieve the party or parties from whom contribution may be sought from any other obligation it or they may have hereunder or otherwise than under this paragraph (d).

 

 

[signatures follow]

 

 

 

 

If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among the Company and the several Underwriters.

	Very truly yours,   IBM CREDIT LLC
	By:	/s/ Adam Wilson
		Name:  Adam Wilson
		Title:    Vice President, Finance

 

IBM Debt Offering

 

 

 

The foregoing Agreement is hereby

confirmed and accepted on the

date specified in Schedule I hereto.

For themselves and the other several

Underwriters, if any, named in

Schedule II to the foregoing Agreement.

CITIGROUP GLOBAL MARKETS INC.

J.P. MORGAN SECURITIES LLC

MERRILL LYNCH, PIERCE, FENNER & SMITH

                              INCORPORATED

WELLS FARGO SECURITIES, LLC

By:  CITIGROUP GLOBAL MARKETS INC.
By:	/s/ Adam D. Bordner
	Name:  Adam D. Bordner
	Title:    Vice President

 

 

 

 

 

SCHEDULE I

 

 

Underwriting Agreement dated September 5, 2017

Registration No. 333-219724

Representatives:

Citigroup Global Markets Inc.

388 Greenwich Street

New York, NY 10013

Fax: (646) 291-1469

Attention:  General Counsel

J.P. Morgan Securities LLC

383 Madison Avenue

New York, NY 10179

Fax: (212) 834-6081

Attention:  Investment Grade Syndicate Desk

Merrill Lynch, Pierce, Fenner & Smith

                     Incorporated

50 Rockefeller Plaza

NY1-050-12-01

New York, NY  10020

Attention:  High Grade Debt Capital Markets Transaction Management/Legal

Wells Fargo Securities, LLC

550 South Tryon Street

Charlotte, NC 28202

Attention:  Transaction Management

Title, Purchase Price and Description of Securities:

 

 

 

Sinking fund provisions:  None.

Redemption provisions:  The 2019 Notes, 2021 Notes and 2022 Notes are redeemable in whole or in part, at the option of the Company, as described in the Final Prospectus.  The 2019 Floating Rate Notes and 2021 Floating Rate Notes may not be redeemed prior to maturity.

Closing Date, Time and Location: September 8, 2017, 10:00 a.m., at the offices of Cravath, Swaine & Moore LLP, Worldwide Plaza, 825 Eighth Avenue, New York, New York.

Items specified pursuant to Section 5(f)(iii) to be covered by the letter from PricewaterhouseCoopers LLP delivered pursuant to Section 5(f):  None.

Statements covered by Section 7(b):

1.

The statements set forth in the first sentence of the last paragraph of the cover page of the Preliminary Final Prospectus and the Final Prospectus.

2.

The sentence “The underwriters have informed IBM Credit that they intend to make a market in the Notes but are under no obligation to do so and such market making may be terminated at any time without notice.” in the Preliminary Final Prospectus and the Final Prospectus.

3.

The statements contained in the fourth and seventh through ninth paragraphs and the first, fourth, fifth and sixth sentences of the tenth paragraph under the caption “Underwriting” in the Preliminary Final Prospectus and the Final Prospectus.

Other Terms:

1.

Each of the Underwriters agrees that it will not offer, sell, or deliver any of the Securities, directly or indirectly, or distribute the prospectus supplement or prospectus or any other offering material relating to the Securities, in or from any jurisdiction except under circumstances that will, to the best of the Underwriters’ knowledge and belief, result in compliance with the applicable laws and regulations and which will not impose any obligations on the Company.

 

 

The Underwriters also agree to abide by the following offering restrictions:

European Economic Area

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), each Underwriter represents and agrees that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”) it has not made and will not make an offer of the Securities to the public in that Relevant Member State other than:

provided that no such offer of the Securities shall require the Company or any Underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer of Securities to the public” in relation to any Securities in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Securities to be offered so as to enable an investor to decide to purchase or subscribe for the Securities, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State, the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.

United Kingdom

Each Underwriter represents and agrees that it and each of its affiliates:

 

2.

For purposes of Section 8, the 2019 Floating Rate Notes, 2021 Floating Rate Notes, 2019 Notes, 2021 Notes and 2022 Notes shall be treated as five separate series of Securities, and Section 8 shall apply to each series as if this Underwriting Agreement applied solely to such series.

 

 

 

SCHEDULE II

 

$3,000,000,000
IBM Credit LLC

$600,000,000 Floating Rate Notes due 2019

$600,000,000 Floating Rate Notes due 2021

$800,000,000  1.625% Notes due 2019

$500,000,000  1.800% Notes due 2021

$500,000,000  2.200% Notes due 2022

 

SCHEDULE III

 

Schedule of Free Writing Prospectuses included in the Disclosure Package

Pricing Term Sheet dated September 5, 2017, as filed pursuant to Rule 433.