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- Title
The stampede to convertibles.
- Authors
Jacobs, Tom
- Abstract
In the past two months, as of August 1, 2003, biotechnology drugmakers have issued over $2 billion in convertible debt-$500 million of that to MedImmune alone-at a rate not seen since the 1999-2000 financing boom. For developing biotechnology drugmakers who consume cash for years while moving their potential products through research and development, there may not be a choice among issuing stock, offering straight bonds, or obtaining loans. And for loans and bonds, banks won't take the risk; developing firms can only attract bond buyers with very high interest rates via what are aptly called junk bonds. One variation is the zero coupon convertible bond. Zero coupon means that no interest is paid until maturity, and comes from the day when bond investors were called coupon clippers.
- Subjects
UNITED States; BIOTECHNOLOGY; CONVERTIBLE bonds; PHARMACEUTICAL industry; JUNK bonds; ZERO coupon securities
- Publication
Nature Biotechnology, 2003, Vol 21, Issue 8, p855
- ISSN
1087-0156
- Publication type
Article
- DOI
10.1038/nbt0803-855