Stem-cell bond orders tallied

Individual investors have put in nearly $69 million in orders for California’s $250-million bond offering to fund embryonic stem-cell research, state Treasurer Bill Lockyer said Wednesday.

Because of high demand, the state extended the order period for small investors through 10:30 a.m. today, Lockyer said. The sale then will be opened to institutional investors and the interest rate on the bonds will be set based on those orders.

The annualized yield on the bonds was expected to be about 1.1 percentage points above that of the three-year U.S. Treasury note, a Lockyer spokesman said. That would mean a yield of about 5.15%.

The interest will be subject to federal income tax but not state tax. The state plans to repurchase the bonds from investors in April 2010. Investors can find more information at buycaliforniabonds.com.

The deal is the first bond sale under Proposition 71, which voters approved in 2004. The measure authorized the state to issue $3 billion in general obligation bonds to fund grants for stem-cell research.

Because embryonic stem cells can be grown into any type of cell in the body, some scientists believe they could lead to treatments and cures for diseases. But the research is controversial because the cells are extracted from embryos produced during in-vitro fertilization.

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-- Tom Petruno