| SAN FRANCISCO
SAN FRANCISCO California will give individual
investors the first opportunity to place orders next week
during a $250 million sale of state debt to fund stem-cell
research, the state treasurer said on Thursday.
The general obligation bond sale will be the first of its
kind to raise money for the California Institute for
Regenerative Medicine, which funds research into the use of
stem cells -- including cells from human embryos -- for medical
Stem cells from human embryos may help find cures for many
medical conditions and diseases, according to many scientists,
but their use is controversial. The Bush administration opposes
using cells from destroyed embryos and has limited federal
involvement in research using them.
There are no federal restrictions on state- or privately
funded research efforts like California's, which voters
approved in 2004 through a ballot measure authorizing the
creation of the institute and its bonding authority. The
institute may issue up to $3 billion in debt over 10 years.
State Treasurer Bill Lockyer said he expects individual
investors in California will also endorse next week's offer
with early orders to take part in a long-awaited debt sale,
perhaps the first of many by the state to raise cash for
"There probably is a large group of people in California
who are philosophically committed to this," Lockyer said in a
"We contemplate going back to markets fairly regularly for
these," Lockyer added.
Individual investors may place orders for the debt on
October 3, the day before the bond sale opens to all investors,
including institutional investors.
Of the $250 million issuance, $200 million will fund stem
cell research and roughly $45 million will cover the cost of
issuing the debt and retiring bond anticipation notes sold
while the stem-cell measure was being contested in court.
Individuals placing early orders will receive the same
price for the bonds as large buyers and will not have to pay an
upfront sales commission.
The minimum order for individual investors is $5,000.
Interest earned on the bonds will be subject to federal income
tax but not state income tax.
The sale will follow California's June sale of $2.5 billion
in tax-exempt state general obligation debt that Lockyer opened
first to individual investors. They bought about $690 million
of the debt, exceeding his expectations.