Elan subsidiaries offer to buy back four note series, call floaters

By Angela McDaniels

Tacoma, wash., Sept. 16 - Elan Corp., plc subsidiaries Elan Finance plc and Elan Finance Corp. began an asset sale offer to repurchase up to $721.2 million principal amount of their 8 7/8% senior notes due 2013, floating-rate senior notes due 2013, 8¾% senior notes due 2016 issued on Oct. 2, 2009 and 8¾% senior notes due 2016 issued on Aug. 17, 2010.

The amount on offer is par plus accrued interest, according to a company news release.

The offer will expire at 11:59 p.m. ET on Oct. 14. Settlement is expected to occur on Oct. 17.

The asset sale offer is being made as a result of Elan's sale of its Elan Drug Technologies business to an unrestricted subsidiary of Elan prior to the combination of the business with Alkermes Inc., which closed on Sept. 16. That sale constituted an "asset sale" under the indentures, and the source of funds for the asset sale offer is the cash proceeds received by Elan in connection with that sale.

Any floating-rating rate notes due 2013 not purchased in the offer will be redeemed at par plus accrued interest on Oct. 17. Currently, the amount of these notes outstanding is $10.53 million.

Tender offer

The issuers also began a cash tender offer for the 8 7/8% notes.

The amount of 8 7/8% notes purchased in the tender offer will not exceed the cap, which will be $721.2 million minus the sum of (i) the principal amount of all notes accepted for purchase in the asset sale offer plus (ii) the principal amount of floating-rate notes due 2013 to be redeemed.

The issuers are offering $1,032.39 per $1,000 principal amount of 8 7/8% notes plus accrued interest up to but excluding the settlement date.

The tender offer will expire at 11:59 p.m. ET on Oct. 14. The settlement date is expected to be Oct. 17.

The dealer manager for the tender offer is Morgan Stanley & Co. LLC (800 624-1808 or 212 761-1057). The information agent and depositary is D.F. King & Co., Inc. (800 431-9645 or 212 269-5550).

Elan is a neuroscience-based biotechnology company based in Dublin.

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