The cost of ELA to IBRC is assumed to be 200 basis points higher than the MRO rate but this profitmargin goes to the Central Bank and is subtracted off when calculating the net cost.
Although we expect IBM to maintain its high margins given the strength of its GBS business, a contraction in GBS profitmargin in the future to historical average of rate of 12.5% would result in downside of 5% to the Trefis price estimate.