Moody's may upgrade Elan

Moody's Investors Service said it placed the ratings of Elan Corp. plc under review for possible upgrade, including the Caa2 senior implied and issuer ratings as well as Athena Neurosciences Finance LLC's Caa2 rated $650 million senior notes due 2008 (guaranteed by Elan).

This rating action follows the company's announcement that it plans to issue $850 million in new senior notes and that it will use proceeds to purchase up to $351 million of its $390 million EPIL III notes maturing in March 2005.

Moody's outlook has been positive since April 16, 2004. Moody's said it believes that the issuance of new senior notes - if successfully consummated - should alleviate earlier concerns about Elan's near-term liquidity, stemming from insufficient internal sources of cash to repay the EPIL III maturity and significant cash flow burn.

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