Elan to begin roadshow for new $850 million two-part deal via Morgan Stanley-led syndicate

By Paul Deckelman

New York, Nov. 1 - Elan Corp. was heard by high-yield syndicate sources Monday to be getting ready to hit the road to market its planned $850 million two-part offering of seven-year notes.

The deal is being brought to market via sole bookrunning manager Morgan Stanley, joint lead manager Goldman Sachs, and co-manager J&E Davy Holdings, the sources said.

The Dublin, Ireland-based pharmaceutical company is offering a tranche of senior fixed-rate notes and a tranche of senior floating-rate notes through its wholly owned Elan Finance plc and Elan Finance Corp. subsidiaries. The size of the respective tranches has not yet been determined.

According to sources, the fixed-rate notes would be non-callable for the first four years after their issue and the floaters for the first two years. The notes are being offered under Rule 144A with registration rights.

Elan plans to use the a portion of the proceeds of the offering to fund a tender offer and related consent solicitation for up to $351 million principal amount of series B guaranteed notes and series C guaranteed notes issued by its wholly owned Elan Pharmaceutical Investments III Ltd. subsidiary, which are guaranteed by the parent company. The offering is conditioned upon completion of the consent solicitation, which requires acceptance by holders of a majority of the outstanding principal amount of the series B and series C notes.

The remainder of the proceeds will be used for working capital and other general corporate purposes.

The roadshow for the new deal is scheduled to begin Tuesday and to wrap up Nov. 9. In between, according to syndicate sources, there would be presentations to potential investors in such mid-Atlantic venues as Baltimore, Philadelphia and Pittsburgh, presentations Wednesday in Boston and Thursday in New York, and a stop in Los Angeles Friday. The marketing campaign would then swing back eastward, with presentations Nov. 8 in Minneapolis and Houston and would conclude Nov. 9 in New Jersey, the sources said. Besides the in-person presentations, there would also be several conference calls with selected potential buyers.

Pricing is anticipated shortly after the completion of the roadshow process, around the middle of next week.

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