S&P: Elan on watch

Standard & Poor's said it placed its B+ corporate credit rating on Elan Corp. plc on CreditWatch with positive implications.

The agency said it also affirmed its BB- ratings on unsecured issues of subsidiaries Elan Finance Corp. and Elan Finance plc.

S&P said the issue rating affirmation incorporates a cap on the recovery ratings of unsecured debt issued by BB- category issuers at 3. As a result, a one-notch upgrade of the corporate credit rating would correspond with a revision of the recovery rating on Elan's unsecured debt to a 3 from a 2, leaving the issue rating unchanged.

Improved credit measures from an increase in patent-protected cash flows suggests that S&P will likely revise its assessment that the financial risk profile to aggressive and raise the corporate credit rating with the spin-off of the research-intensive drug discovery unit.

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