Biotech Values

[DewDiligence]

MRK – Yield curve for corporate bonds:

MRK just issued $4.25B of debt to help pay for the SGP acquisition. The terms show the steepness of the yield curve for high-grade corporate bonds (which mimics the steepness of the yield curve for T-bonds).

http://finance.yahoo.com/news/Merck-Prices-425-Billion-Debt-bw-1301927242.html

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$1.25 billion of 1.875% notes due 2011
$1.00 billion of 4.00% notes due 2015
$1.25 billion of 5.00% notes due 2019
$0.75 billion of 5.85% notes due 2039
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MRK’s bonds thus have the following yield curve:

 
 Years to  Interest 
 Maturity    Rate   
    2        1.9% 
    6        4.0% 
   10        5.0% 
   30        5.9%