ARBITRAGE: NEW HOLDRS
Broadband HOLDRS
NEW YORK?The American Stock Exchange today began trading Broadband HOLDRSSM Depositary Receipts, which give investors ownership interest in the stocks of 20 specified companies involved in various segments of the broadband business. A total of 5.9 million depositary receipts were issued yesterday at $94.32 each and will trade under the symbol of BDH.
"Owners of Broadband HOLDRSSM can enjoy the flexibility of undivided beneficial ownership interests in each of the underlying securities represented," said Richard A. Mikaliunas, Amex senior vice president of capital markets. "In addition, the issuers of the underlying securities are among the largest capitalized, most liquid companies in the broadband business."
Broadband HOLDRSSM represent investors? undivided beneficial ownership interest in each of 20 underlying broadband stocks. Investors may buy and sell the receipts in round lots of 100 shares, just as they would any stock. Investors may also cancel their depositary receipts, receiving the underlying shares, or request creation of additional depositary receipts by delivering to the trust the required underlying stock. The 20 stocks in the trust are:
Lucent Technologies, Inc. (LU) Terayon Comm. Systems Inc. (TERN)
Nortel Networks Corp. (NT) PMC ? Sierra Inc. (PMCS)
Motorola Inc. (MOT) Comverse Technology Inc. (CMVT)
Qualcomm Inc. (QCOM) SDL Inc. (SDLI)
JDS Uniphase Corp. (JDSU) Conexant Systems Inc. (CNXT)
Broadcom Corp. Class A (BRCM) Next Level Comm. Inc. (NXTV)
Corning Inc. (GLW) RF Micro Devices Inc. (RFMD)
Sycamore Networks Inc. (SCMR) Scientific-Atlanta Inc. (SFA)
Applied Micro Circuits Corp. (AMCC) CIENA Corp. (CIEN)
Tellabs Inc. (TLAB) Copper Mtn. Networks Inc. (CMTN)
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NEW YORK, Feb. 1 /PRNewswire/ -- Merrill Lynch today announced the launch of Telecom HOLDRS(SM) and Pharmaceutical HOLDRS(SM), two new securities that provide ownership in the common stock of 20 specified companies that are involved in various segments of each of the telecommunications and pharmaceuticals industries.
Both Telecom HOLDRS (Amex: TTH) and Pharmaceutical HOLDRS (Amex: PPH) were priced for initial sale to the public yesterday afternoon at an aggregate offering price in excess of $1.5 billion, which represents an issuance of 9.9 million Telecom HOLDRS and 6.8 million Pharmaceutical HOLDRS. Trading in the new securities began today on the American Stock Exchange and will be available on a continuous basis.
"Telecom HOLDRS and Pharmaceutical HOLDRS provide diversified exposure to two core market sectors through investments that are efficient and flexible," said Steve Bodurtha, head of Merrill Lynch's Customized Investments Group. "The size of these initial offerings clearly shows that investors continue to be enthusiastic about HOLDRS."
TTH and PPH are Merrill Lynch's latest offerings from its new, innovative HOLDRS investment structure. On Sept. 23, 1999, the firm introduced Internet HOLDRS (Amex: HHH), the first registered U.S. security to represent investors' undivided ownership rights in other U.S. securities. Since inception, HHH has traded an average of more than one million shares per day.
Along with Biotech HOLDRS (Amex: BBH, introduced Nov. 23, 1999), there are more than 14 million HHH and BBH shares outstanding, with an aggregate market value of more than $2 billion. As with HHH and BBH, Telecom HOLDRS and Pharmaceutical HOLDRS can only be traded, issued and cancelled in round-lots of 100 HOLDRS.
The specific share amounts underlying each round-lot of 100 Telecom HOLDRS and Pharmaceutical HOLDRS, respectively, are set forth in the charts below. The share amounts in these charts should not change except for changes due to corporate events such as stock splits or reverse splits on the underlying securities or reconstitution events.
TELECOM HOLDRS
Ticker Name of Company Shares Per HOLDRS
Round Lot
SBC SBC Communications Inc. 27
T AT & T Corp 25
WCOM MCI WorldCom, Inc. 22
BEL Bell Atlantic Corporation 12
BLS BellSouth Corporation 15
GTE GTE Corporation 8
BCE BCE Inc. 5
FON Sprint Corporation 6
PCS Sprint Corp (PCS Group) 3
GBLX Global Crossing Ltd. 6
NXTL Nextel Communications, Inc. 3
USW U S WEST, Inc. 4
Q Qwest Communications International Inc. 6
LVLT Level 3 Communications, Inc. 3
AT ALLTEL Corporation 2
TDS Telephone and Data Systems, Inc. 1
NTLI NTL Incorporated 1
BRW Broadwing Inc. 2
MCLD McLeodUSD Incorporated 1
CTL CenturyTel, Inc. 1
PHARMACEUTICAL HOLDRS
Ticker Name of Company Shares Per HOLDRS
Round Lot
MRK Merck & Co., 22
PFE Pfizer Inc. 36
JNJ Johnson & Johnson 13
BMY Bristol-Myers Squibb Company 18
LLY Eli Lilly and Company 10
WLA Warner-Lambert Company 8
SGP Schering-Plough Corporation 14
AHP American Home Products Corporation 12
ABT Abbott Laboratories 14
PNU Pharmacia & Upjohn, Inc. 5
BVF Biovail Corporation 2
KING King Pharmaceuticals 1
FRX Forest Laboratories, Inc. 1
ADRX Andrx Corporation 1
AGN Allergan, Inc. 1
JMED Jones Pharma Incorporated 1
WPI Watson Pharmaceuticals, Inc. 1
ICN ICN Pharmaceuticals, Inc. 1
MYL Mylan Laboratories, Inc. 1
IVX IVAX Corporation 1
An investor may obtain either TTH or PPH by purchasing them in the secondary market or by depositing with the Trustee the required share amounts of the 20 underlying stocks and paying an issuance fee of up to $0.10 per HOLDR to the Trustee. Investors also may cancel their HOLDRS by presenting them to the Trustee and paying a cancellation fee of up to $0.10 per HOLDR to the Trustee in return for delivery to the investor of the 20 stocks represented by the HOLDRS. The issuance and cancellation of HOLDRS is not a taxable event, and this mechanism will provide investors with investing and trading flexibility.
Merrill Lynch is one of the world's leading financial management and advisory companies with offices in 44 countries and total client assets exceeding $1.7 trillion. As an investment bank, it is the top global underwriter and market maker of debt and equity securities and a leading strategic advisor to corporations, governments, institutions, and individuals worldwide. Through its Asset Management Group, the company is one of the world's largest managers of financial assets, which total approximately $557 billion.
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SOURCE: Merrill Lynch & Co., Inc.
CONTACT: Erik T. Hendrickson, Media Relations of Merrill Lynch, 212-449-7293, or ehendrickson@exchange.ml.com
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