Canadian company Drug Royalty Corp. is showing the market $42 million in single-A rated notes backed by pharmaceutical patent royalties. What the market isn't seeing - the pre-sold triple-B and double-B rated tranches - makes this the first senior/subordinated offering backed by this type of asset.

Wachovia Securities is leading the $68 million offering with an expected maturity of October 15, 2011, and a lone rating from Standard & Poor's. The pool is comprised of eight royalty streams stemming from Food and Drug Administration-approved drugs from highly rated marketers, including GlaxoSmithKline, Schering Plough and Amgen, among others, an S&P analyst said.

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