RESEARCH TRIANGLE PARK – IBM is turning to the bond market to come up with the capital needed to pay for its pending $34 billion acquisition of Raleigh-based Red Hat, according to the Financial Times and other reports.

The bond raise is a big one, too.

“If the company reaches the US$20bn size it stated in its investor presentation, it would be the largest investment-grade deal of the year so far – topping Bristol-Myers Squibb’s US$19bn deal that priced on Tuesday,” reports International Financing Review.

The deal is expected to close in the second half of this year, having already won approval from the U.S. Justice Department.

IBM’s Rometty: Red Hat will remain independent – ‘I don’t have a death wish’

Approval from the European Union is still needed, Red Hat CEO Jim Whitehurst said at the Red Hat Summit in Boston on Tuesday.

Bloomberg news says IBM is offering bonds ranging from $1.5 billion for two years and $3 billion for 30 years,

“IBM has a pre-acquisition debt load of about $50B but still has high credit ratings,” business news site SeekingAlpha reports.

Red Hat CEO: Merger with IBM already creating culture clashes

“The company plans to suspend buybacks in 2020 and 2021 to focus on] paying down the debt,” SeekingAlpha added.

The deal was announced last October.

Watch the video: Jim Whitehurst talks with future boss Ginni Rometty