After months of marketing, the $225 million pharmaceutical patent royalty securitization from Royalty Pharma Finance Trust, just the second ever such transaction, closed last week after having been placed into an undisclosed conduit. Structured and underwritten by Credit Suisse First Boston, structural changes and additional credit enhancement were added to the trade to mitigate the risks that led to the 2000 transaction, BioPharma Royalty Trust I, entering into early amortization late last year.

Rated triple-A by Moody's and Standard & Poor's, primarily due to the MBIA wrap. The diversity of the patent rights incorporated into this trust was also a major factor, according to CSFB director Rob Horowitz. "The previous deal's early amortization was taken into account," said Horowitz, who added that the revolving nature of this offering and thus the ability to replace potential underperforming assets quelled concerns. "BioPharma performed as expected given the events, triggers were tripped and it's paying out on schedule," he added.

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