11. Borrowings:

Short-Term Debt

	At March 31,		At December 31,
(Dollars in millions)	2018		2017
Commercial paper	$	1,997	$	1,496
Short-term loans	221		276
Long-term debt — current maturities	3,758		5,214

Total	$	5,977	$	6,987

The weighted-average interest rate for commercial paper at March 31, 2018 and December 31, 2017 was 1.8 percent and 1.5 percent, respectively. The weighted-average interest rate for short-term loans was 7.6 percent and 8.8 percent at March 31, 2018 and December 31, 2017, respectively.

Long-Term Debt

Pre-Swap Borrowing

		Balance		Balance
(Dollars in millions)	Maturities	3/31/2018		12/31/2017
U.S. dollar debt (average interest rate at March 31, 2018):*
7.2%	2018	$	1,774	$	4,640
2.8%	2019	5,619		5,540
2.0%	2020	3,396		3,416
2.4%	2021	5,248		4,129
2.4%	2022	3,404		3,481
3.3%	2023	2,250		1,547
3.6%	2024	2,000		2,000
7.0%	2025	600		600
3.5%	2026	1,350		1,350
4.7%	2027	969		969
6.5%	2028	313		313
3.7%	2030	30		—
5.9%	2032	600		600
8.0%	2038	83		83
5.6%	2039	745		745
4.0%	2042	1,107		1,107
7.0%	2045	27		27
4.7%	2046	650		650
7.1%	2096	316		316

		$	30,481	$	31,515
Other currencies (average interest rate at March 31, 2018, in parentheses):*
Euros (1.5%)	2019—2029	$	10,780	$	10,502
Pound sterling (2.7%)	2020—2022	1,474		1,420
Japanese yen (0.3%)	2022—2026	1,370		1,291
Other (5.7%)	2018—2021	636		717

		$	44,740	$	45,445
Less: net unamortized discount		822		826
Less: net unamortized debt issuance costs		93		93
Add: fair value adjustment**		343		526

		$	44,168	$	45,052
Less: current maturities		3,758		5,214

Total		$	40,410	$	39,837

*Includes notes, debentures, bank loans, secured borrowings and capital lease obligations.

**The portion of the company’s fixed-rate debt obligations that is hedged is reflected in the Consolidated Statement of Financial Position as an amount equal to the sum of the debt’s carrying value and a fair value adjustment representing changes in the fair value of the hedged debt obligations attributable to movements in benchmark interest rates.

There are no debt securities issued and outstanding by IBM International Group Capital LLC, which is an indirect, 100 percent owned finance subsidiary of International Business Machines Corporation, the parent. Any debt securities issued by IBM International Group Capital LLC, would be fully and unconditionally guaranteed by the parent.

During the third quarter of 2017, IBM Credit LLC, a wholly owned subsidiary of the company, filed a shelf registration statement with the Securities and Exchange Commission (SEC) allowing it to offer for sale public debt securities. In 2017, IBM Credit LLC issued fixed and floating rate debt securities in the aggregate amount of $3.0 billion with maturity dates ranging from 2019 to 2022. During the first quarter of 2018, IBM Credit LLC issued fixed and floating rate debt securities in the aggregate amount of $2.0 billion with maturity dates ranging from 2021 to 2023. This debt is included in the long-term debt table above.

The company’s indenture governing its debt securities and its various credit facilities each contain significant covenants which obligate the company to promptly pay principal and interest, limit the aggregate amount of secured indebtedness and sale and leaseback transactions to 10 percent of the company’s consolidated net tangible assets, and restrict the company’s ability to merge or consolidate unless certain conditions are met. The credit facilities also include a covenant on the company’s consolidated net interest expense ratio, which cannot be less than 2.20 to 1.0, as well as a cross default provision with respect to other defaulted indebtedness of at least $500 million.

The company is in compliance with all of its significant debt covenants and provides periodic certifications to its lenders. The failure to comply with its debt covenants could constitute an event of default with respect to the debt to which such provisions apply. If certain events of default were to occur, the principal and interest on the debt to which such event of default applied would become immediately due and payable.

Pre-swap annual contractual maturities of long-term debt outstanding at March 31, 2018, are as follows:

(Dollars in millions)	Total
2018 (for Q2 - Q4)	$	2,112
2019	6,975
2020	6,458
2021	6,491
2022	4,333
2023 and beyond	18,370

Total	$	44,740

Interest on Debt

(Dollars in millions)
For the three months ended March 31:	2018		2017
Cost of financing	$	182	$	158
Interest expense	165		135
Interest capitalized	3		0

Total interest paid and accrued	$	349	$	293