Bank of America (NYSE:BAC), JPMorgan (NYSE:JPM) and Morgan Stanley (NYSE:MS) Hired by Abbott (NYSE:ABT) for $3 Billion Bond Issue

Bank of America (NYSE:BAC), JPMorgan (NYSE:JPM) and Morgan Stanley (NYSE:MS) have been hired, along with Barclays Plc and Deutsche Bank AG, to manage the sale of $3 billion in bonds, which will be the largest corporate bond sale in about a month.

In a prospectus filed with the Securities and Exchange Commission, Abbot Laboratories said they’ll use the funds to pay down it commercial paper, which stands at $3.6 billion. General business purposes was the other reason cited for the issuance.

The bond offering includes $750 million of 5-year notes, with a potential yield of 70 basis points over similar Treasury offerings. There is also $1 billion in debt for 10 years, which could yield up to 90 basis points over their government competitors, and another $1.25 billion of 30-year bonds, which could pay a point spread of 122 basis points over Treasury bonds.

Those above figures aren’t confirmed yet, but an insider close to the situation said it’s close to what will be issued.

Corporate bond volume around the world has plunged in May, dropping from $183 billion in April to only $47 billion so far. Most of that is thought to be the result of the sovereign debt crisis in Europe.
 
Concerns of Moody’s are the debt load after the acquisition of Piramal Healthcare for $3.72 billion will cause the company to carry a “substantial” amount of debt in the short term.

Abbott was upgraded from “Hold” from “Sell” today by Citigroup (NYSE:C) analyst Mathew Dodds, basing it on the emerging markets strategy of the company.

Abbott is set to license a minimum of 24 products for sale in emerging markets in May.

Even so, Dodd did revise his target price on Abbott from $50 to $47 a share.

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