11. Borrowings:

Short-Term Debt

	At June 30,		At December 31,
(Dollars in millions)	2016		2015
Commercial paper	$	—	$	600
Short-term loans	301		590
Long-term debt — current maturities	4,586		5,271

Total	$	4,887	$	6,461

The weighted-average interest rate for commercial paper at December 31, 2015 was 0.4 percent. The weighted-average interest rate for short-term loans was 10.6 percent and 5.2 percent at June 30, 2016 and December 31, 2015, respectively.

Long-Term Debt

Pre-Swap Borrowing

		Balance		Balance
(Dollars in millions)	Maturities	6/30/2016		12/31/2015
U.S. dollar notes and debentures (average interest rate at June 30, 2016):
3.36%	2016–2017	$	7,198	$	9,351
3.17%	2018–2019	8,841		7,591
1.72%	2020–2021	4,943		3,717
2.35%	2022	1,901		1,900
3.38%	2023	1,500		1,500
3.63%	2024	2,000		2,000
7.00%	2025	600		600
3.45%	2026	1,350		—
6.22%	2027	469		469
6.50%	2028	313		313
5.88%	2032	600		600
8.00%	2038	83		83
5.60%	2039	745		745
4.00%	2042	1,107		1,107
7.00%	2045	27		27
4.70%	2046	650		—
7.13%	2096	316		316

		$	32,644	$	30,319
Other currencies (average interest rate at June 30, 2016, in parentheses):
Euros (1.6%)	2016–2028	$	7,493	$	4,892
Pound sterling (2.7%)	2017–2022	1,400		1,555
Japanese yen (0.3%)	2017–2022	1,383		1,180
Swiss francs (6.3%)	2020	8		9
Canadian (2.2%)	2017	385		360
Other (12.4%)	2016–2020	715		506

		$	44,027	$	38,820
Less: net unamortized discount		853		838
Less: net unamortized debt issuance cost		90		74
Add: fair value adjustment*		1,140		790

		$	44,224	$	38,699
Less: current maturities		4,586		5,271

Total		$	39,638	$	33,428

*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 plus 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.

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 June 30, 2016, are as follows:

(Dollars in millions)	Total
2016 (for Q3-Q4)	$	2,128
2017	6,943
2018	4,794
2019	5,247
2020	4,751
2021 and beyond	20,164

Total	$	44,027

Interest on Debt

(Dollars in millions)
For the six months ended June 30:	2016			2015
Cost of financing	$	284		$	276
Interest expense	341			225
Net investment derivative activity	(26		)	(3		)
Interest capitalized	1			(3		)

Total interest paid and accrued	$	600		$	496