Bloomberg News

Abbott Tenders for Bonds Before $16 Billion in Debt Issuance

October 26, 2012

Abbott Laboratories (ABT:US) said it will tender for as much as $7.7 billion of bonds as the drug and medical-device company that plans to split in two prepares to raise about $16 billion of debt.

A deal that size would be the biggest since 2009, when a new issue last topped $10 billion, according to data compiled by Bloomberg. The largest offerings this year include a $9.8 billion issue from United Technologies Corp. in May and a $7.5 billion sale from Anheuser-Busch InBev NV in July, Bloomberg data show.

Abbott, which makes the world’s top-selling medicine Humira, made a tender offer for four bonds with $4.75 billion outstanding and as much as 47.2 percent on five other issues with $6.25 billion, the company said today in a statement.

AbbVie Inc., a spinoff of Abbott’s pharmaceutical operations, will raise just under $16 billion of debt in coming weeks, Thomas Freyman, senior vice president, finance and chief financial officer at Abbott said on an Oct. 17 earnings call. AbbVie will make a cash distribution of about $8.5 billion to Abbott which the company will use to help fund the tender and pay down a portion of its commercial paper debt.

Abbott’s corporate credit and senior unsecured ratings were lowered to A+ from AA by Standard & Poor’s today due to the spinoff, the ratings company said in a release.

Third-quarter sales fell 0.4 percent to $9.77 billion from a year earlier, missing the $9.94 billion average of 14 analyst estimates compiled by Bloomberg. Excluding the effect of foreign currency exchange, sales increased 4.1 percent, Abbott said in a statement today.

AbbVie will pay a $1.60 a share annual dividend, while Abbott shareholders will get 56 cents a year.

To contact the reporter on this story: Sarika Gangar in New York at sgangar@bloomberg.net;

To contact the editor responsible for this story Alan Goldstein at agoldstein5@bloomberg.net;


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Companies Mentioned

  • ABT
    (Abbott Laboratories)
    • $41.18 USD
    • -0.41
    • -1.0%
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