ROCHE RAISES $702 MILLION IN US PLACEMENT

Swiss pharmaceutical company Roche Holding has raised $702 million through a private placement of convertible securities in the USA. Convertible bonds can be transformed into equity when the issuing company's share price reaches a certain level above the share price at the time of issue.

The offering consists of 15-year convertible bonds, with a 4.75% coupon and a conversion premium of 33%. The bonds are only convertible into American Depositary Receipts, and investors cannot exchange the ADRs for underlying Roche stock for five years, unless Roche registers its shares with the US Securities and Exchange Commission before 1998, reports the Wall Street Journal, which does not consider this to be likely.

Health care analysts are generally in agreement that Roche has years of strong earnings growth ahead of it. For the current year, analysts are expecting an increase in net profits of between 25% and 27%. Next year, a 15%-to-20% increase in net profits is likely.