Moody's affirms Elan

Moody's Investors Service said it affirmed the ratings of Elan Corp. plc (B3 senior unsecured) following the announcement that Elan and Biogen IDEC have suspended the marketing of Tysabri following two incidents of progressive multifocal leukoencephalopathy of patients in ongoing clinical trials.

Moody's affirmed Elan Corp. plc's Caa1 issuer rating, Elan Finance plc's B3 $850 million fixed-rate senior notes due 2011 and $300 million floating-rate senior notes due 2011 and Athena Neurosciences Finance LLC's B3 rated $650 million senior notes due 2008.

At the same time, Moody's revised Elan's outlook to negative from stable.

Moody's said the rating outlook is being revised to negative to reflect higher refinancing risk associated with Elan's 2008 debt maturities, heightened challenges of returning to positive cash flow and greater uncertainty regarding Elan's longer term viability if the marketing of Tysabri does not resume.

Elan's ability to generate positive cash flow has now become much less certain, according to Moody's, and depends highly on the fate of Tysabri.

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