State Treasurer Bill Lockyer today announced that individual investors snapped up $102.8 million of $250 million in bonds during the first sale conducted under Proposition 71, the $3 billion stem cell research measure approved by voters in 2004.
The $102.8 million in purchases by individuals comprised 41.1 percent of the total, and more than tripled the amount expected by the Treasurer’s Office and its underwriting team, Lockyer’s office says. 18 institutional investors (such as mutual funds, banks or insurance companies) bought the balance of the $250 million during the sale that started Wednesday and ended today.
“The investment by individuals far exceeded our expectations and shows how strongly Californians believe in the promise of stem cell research to cure diseases and relieve suffering,” said Lockyer. “Proposition 71 paved the way for a new approach to finance biomedical research and the development of intellectual capital. This sale gets that endeavor off to a great start.”
Robert N. Klein, chairman of the California Institute for Regenerative Medicine governing board and author of Proposition 71, said he believes many of the investors are patients suffering from debilitating disease or injury. “They’re making an investment in their future — not simply their financial future, but their future quality of life.”
The minimum buy-in for individual investors was $5,000, and interest earned on the bonds will be subject to federal income tax but not state income tax.The interest rate on the bonds will be 5.168 percent, which is 1.15 percentage points above today’s rate on three-year U.S. Treasury notes. The $250 million sale will provide the nation’s largest-ever State investment in human embryonic stem cell research –Lockyer noted the National Institutes of Health since FY 2002 has funded only $131 million worth of this research.