13. Borrowings:

Short-Term Debt

	At March 31,		At December 31,
(Dollars in millions)	2019		2018
Commercial paper	$	2,993	$	2,995
Short-term loans	150		161
Long-term debt — current maturities	7,106		7,051

Total	$	10,250	$	10,207

The weighted-average interest rate for commercial paper at March 31, 2019 and December 31, 2018 was 2.5 percent at both periods. The weighted-average interest rate for short-term loans was 5.8 percent and 4.3 percent at March 31, 2019 and December 31, 2018, respectively.

Long-Term Debt

Pre-Swap Borrowing

		Balance		Balance
(Dollars in millions)	Maturities	3/31/2019		12/31/2018
U.S. dollar debt (weighted-average interest rate at March 31, 2019):*
3.2%	2019	$	3,959	$	5,465
2.6%	2020	4,338		4,344
2.9%	2021	5,531		5,529
2.5%	2022	3,529		3,536
3.2%	2023	2,413		2,428
3.6%	2024	2,046		2,037
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	149		32
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

		$	28,726	$	30,131
Other currencies (weighted-average interest rate at March 31, 2019, in parentheses):*
Euros (1.3%)	2019–2031	$	15,438	$	10,011
Pound sterling (2.7%)	2020–2022	1,368		1,338
Japanese yen (0.3%)	2022–2026	1,314		1,325
Other (6.5%)	2019–2022	500		391

		$	47,346	$	43,196
Less: net unamortized discount		831		802
Less: net unamortized debt issuance costs		88		76
Add: fair value adjustment**		406		337

		$	46,833	$	42,656
Less: current maturities		7,106		7,051

Total		$	39,727	$	35,605

*Includes notes, debentures, bank loans, secured borrowings and finance 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 IBM, the parent. Any debt securities issued by IBM International Group Capital LLC, would be fully and unconditionally guaranteed by the parent.

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 obligations of long-term debt outstanding at March 31, 2019, are as follows:

(Dollars in millions)	Total
2019 (for Q2 - Q4)	$	5,459
2020	7,374
2021	6,700
2022	4,354
2023	5,358
2024 and beyond	18,102

Total	$	47,346

Interest on Debt

(Dollars in millions)
For the three months ended March 31:	2019		2018
Cost of financing	$	179	$	182
Interest expense	210		165
Interest capitalized	2		3

Total interest paid and accrued	$	391	$	349

Lines of Credit

On October 28, 2018, the company announced its intent to acquire all of the outstanding shares of Red Hat. In connection with this acquisition, IBM entered into a commitment letter under which certain banks committed to provide the company with a 364-day unsecured bridge term loan facility in an aggregate principal amount of up to $20 billion to fund the acquisition. The company also entered into a fee letter in connection with the 364-day bridge facility, under which the company incurred $60 million in fees. These fees were capitalized and are being amortized to SG&A in the Consolidated Statement of Earnings over the expected term of the bridge term loan facility. For additional information on this transaction, see note 11, “Acquisitions/Divestitures.”