The Issuance of Bonds by Roche Holding - Essay Example

The impact of the issuance of bonds is that it will reduce the risks by spreading it to different shareholders. The investment required to acquire Genentech exposes a company to numerous risks, which need to be spread to other parties. This is essential to avoid financial distress during the economic recession period or when the market valuation drops. It is also significant that the issuance of bonds will facilitate reinvestment interests, especially if the company lowers the semi-annual payments.

This can happen during the maturity period of the bond and when the rates are more than 10 percent of the issuing rate. Alternatively, issuing the bonds to the public will increase the acquisition bid from other interested parties. This implies that other organizations that enter the deal by placing higher offers to Genentech management. It is evident that the involvement of the public through the sale of bonds is always aimed at raising capital. As a result, a private firm that has the capital can take over the offer by raising its acquisition rates.