S&P rates Elan notes B

Standard & Poor's said it assigned Elan Finance plc's $200 million 8¾% senior unsecured notes due 2016, privately placed under Rule 144A, a rating of B with a recovery rating of 3, indicating an expectation of 50% to 70% recovery for noteholders in a default. The B rating is at the same level as the B corporate credit rating on parent company Elan Corp. plc, in accordance with a notching criteria for a 3 recovery rating.

The outlook is positive.

These notes are in lieu of a previously announced add-on to the company's existing 8¾% notes, as market conditions were not favorable for the add-on, S&P said.

Proceeds will be used to repay senior floating-rate notes due November 2011.

The ratings reflect the company's critical dependence on sales of its multiple sclerosis treatment, Tysabri, S&P said.

The company has adequate liquidity following last year's sale of its Alzheimer's new drug program and subsequent senior unsecured note issuance, the agency said.

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