Chiron Corp. will redeem on Oct. 21 all $121.5 million inprincipal of its 7.25 percent convertible subordinateddebentures due in 2015, the company said Tuesday.

The redemption price is $1,080.15 per $1,000 debenture.Alternatively, bondholders can convert their debentures intoChiron common stock (NASDAQ:CHIR) at 21.277 shares per$1,000, or $50.77 per share.

Chiron stock closed Tuesday at $50 a share, down $1.50.

A company that issues debentures has the option of callingthem in at any time after a specified date.

"Most typically a company will do this when the trading priceof the stock is substantially above the convertible price of thebond (debenture)," said Larry Kurtz, vice president of corporatecommunications at Chiron of Emeryville, Calif.

"Chiron decided it was advantageous to call the debenturesnow after looking at the current interest rates, the currentprice of its stock, the amount of cash on hand, the amount ofcash it will need over the next few years, and the yield it isgetting on its holdings," he said. -- Jennifer Van Brunt

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