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MAKING A MARKET OUT OF SNIFFLESWALL STREET LATELY IS securitizing willy-nilly. It sells bonds backed by the upcoming payments, called receivables, for everything from delinquent child support to David Bowie's royalties. Among asset-backed securities, what's getting attention now? Health care, a largely untapped--but growing--area with billions in receivables. Smith Barney created a buzz on the Street last year by securitizing drugstore receivables in an $80 million private placement for the Pharmacy Fund, which administers bill payments electronically. A $120 million secondary offering is on tap for the fall. The Pharmacy Fund is eyeing a major expansion further into the medical field. Executives say they are in talks with one of the nation's largest hospital chains to let its bills be packaged into securities. Pharmacy Fund says it is also negotiating for similar ventures with a leading medical laboratory and a huge doctors' consortium. Lots of Wall Street firms are eager to jump in on this deal or others. Executives at Lehman Brothers say the firm is vigorously pursuing health-care securitizing. In particular, Lehman hopes to bring to market a nursing-homes and home health-care deal by the end of 1997.
Lisa Sanders
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Updated June 27, 1997 by bwwebmaster
Copyright 1997, by The McGraw-Hill Companies Inc. All rights reserved.
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