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Biotech / Medical : Biotech Valuation
CRSP 55.11-2.6%Nov 7 3:59 PM EST
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To: Biomaven who started this subject2/24/2002 4:17:13 PM
From: IRWIN JAMES FRANKEL  Read Replies (2) of 52153
 
Article in BW - 3/4/02 on Convertibles pg 36

Select quotes:

... over the next 18 months, nearly $30 billion in convertible securities issued by the likes of Anadarko Petroleum, Household International and Medtronic could come due. Next year, Selectron Corp alone could be on the hook for $2.5 billion, while Tyco may have to repay nearly $6 billion in convertibles.

... bond repayments could stunt the recovery by diverting billions into debt service that companies could otherwise have spent on capital investments.

Tyco's CFO ... notes that the first of the company's two convertible payments due next February, for $2.3 billion, can be repaid in stock. * ... the $3.5 billion due in November, 2003 "will have to be settled in cash"

The market is not going to refinance converts easily.

ij

* "can be repaid in stock". Sounds like the company has the right to reduce the conversion price and put out stock instead of cash. Sounds "toxic" - that could create quite a reaction.
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