Rule 424(b)(3)
                                             Registration No. 333-37034
                         PRICING SUPPLEMENT NO. 2
                     TO PROSPECTUS DATED June 20, 2000
                      (As supplemented June 20, 2000)


                            MEDIUM-TERM NOTES
                            (Fixed Rate Note)

             (Due from one year to 30 years from date of issue )

Designation:  Fixed Rate               Original Issue Date:
Medium-Term Notes Due                  March 8, 2002
June 30, 2005

Principal Amount:  $250,000,000        Maturity Date:
                                       June 30, 2005

Net Proceeds to Issuer (as a percentage of        Regular Record Dates:
 Principal Amount):  99.568%           Fifteenth calendar day, whether
                                       or not a Business Day prior to
                                       the corresponding Interest
                                       Payment Date.

Interest Rate:  4.125%                  Interest Payment Dates:
Semi-Annual on June 30 and December 30, commencing June 30, 2002.

Commission or Discount (as a
percentage of Principal Amount): N/A%

CUSIP:  459 20Q CT9                    Redemption Provisions:  None

Form: [X] Book-Entry
      [ ] Certificated


     This is a Pricing Supplement. It describes the Fixed Rate Notes being
issued under the Medium Note Program of International Business Machines
Corporation. This document adds to, or 'supplements' the description
of the Notes referred to in the accompanying Prospectus Supplement and
Prospectus. It does so by providing specific pricing and other information
about the Notes issued in this particular transaction. This Pricing
Supplement also amends the Prospectus Supplement and Prospectus to the extent
that the description of the Notes in this Pricing Supplement is different
from the terms which are set forth in the Prospectus Supplement and


      Interest on the Notes will be calculated based on a year of 360 days
consisting of 12 months of 30 days each.

     If any payment of principal or interest is due on a day that is not
a Business Day, that payment may be made on the next day which is a
Business Day. No additional interest will accrue as a result of the delay in
payment. For purposes of this offering, the term "Business Day" means each
day on which commercial banks and foreign exchange markets settle payments
in The City of New York. We have capitalized a number of terms in this
document. If you do not see a definition for those terms in this document,
those terms will have the meanings which we have already given to them in
the Prospectus Supplement and the Prospectus.


      The Notes are not redeemable by the Company.


      Notes in the total Principal Amount of $250,000,000 will be sold
to Morgan Stanley & Co. Incorporated at the Net Proceeds Price set
forth at the top of this Pricing Supplement. They, in turn, will
resell these Notesto investors at varying prices, which prices
are subject to prevailing market conditions at the time of resale.

Dated:  March 5, 2002