Elan receives consents to amend Elan Pharmaceutical III notes

New York, Nov. 11 - Elan Corp. plc said it received the necessary consents to amend the $390 million principal amount of the series B guaranteed notes and series C guaranteed notes issued by its subsidiary, Elan Pharmaceutical Investments III Ltd.

Elan said it now expects to enter into an amendment to the guarantee agreement governing Elan's guarantee of the notes to eliminate many of the restrictive covenants and a consent agreement under the indenture for Elan Capital Corp. Ltd.'s 6.5% convertible guaranteed notes to effectively permanently waive compliance with all of the restrictive covenants in the convertible indenture restricting certain activities of Elan and its subsidiaries without the prior consent of a majority in aggregate principal amount of the outstanding Elan Pharmaceutical Investments III notes.

The changes will only be effective when Elan buys the notes in the tender.

Elan said on Oct. 28 it had begun a cash tender offer for up to $351 million of the $390 million principal amount of the series B and series C notes issued by Elan Pharmaceutical Investments III.

Elan said it was also soliciting consents to amend the guarantee agreement for the notes and the 6.5% convertibles.

Elan needs the consent of holders of a majority of the principal amount of the notes to make the change.

Holders cannot tender without delivering consents.

The Dublin, Ireland, biotechnology company is making the offer through its Elan International Services Ltd. subsidiary.

Holders who tendered by the early tender deadline of midnight ET on Nov. 10 will receive $1,013.50 per $1,000 principal amount, including an early tender premium of $13.50 per $1,000 principal amount.

Holders who tender after the early deadline but before the expiration deadline of midnight ET on Nov. 26 will receive par.

In both cases Elan will pay accrued interest up to but excluding the settlement date.

In addition, Elan will pay a consent fee of $5.00 per $1,000 if it receives tenders of a majority of the notes.

The tender is subject to the receipt of tenders and consents of at least a majority of the principal amount of the notes and completion of a debt financing on acceptable terms. Elan also announced the sale of $850 million of new notes - upsized at pricing on Nov. 10 to $1.15 billion.

Morgan Stanley & Co. Inc. is dealer manager (800 624-1808 or 212 761-1941 (collect), attention Francesco Cipollone).

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