off of CreditWatch......
Tuesday March 26, 4:28 pm Eastern Time
TEXT-S&P cuts Elan Corp Plc corporate credit rating
(UPDATE: Press release provided by Standard & Poor's)
NEW YORK, March 26 - Standard & Poor's said today that it lowered its corporate credit rating on specialty pharmaceutical company, Elan Corp. PLC (NYSE:ELN - news), to triple-'B'-minus from triple-'B', based on Elan's reduced earnings and cash flow expectations and expected, significant debt-financed product acquisitions over the next two years.
Also, the senior unsecured debt ratings on Dublin, Ireland-based Elan were lowered to triple-'B'-minus from triple-'B'. All ratings were removed from CreditWatch, where they were placed on Feb. 6, 2002. Total rated debt is $2.7 billion. The outlook is stable.
``The outlook assumes that Elan will maintain a high level of financial flexibility, as it funds its planned future product acquisitions, as well as successfully restores the company to higher earnings growth,'' said Standard & Poor's credit analyst Arthur Wong.
The low investment-grade ratings on Elan reflect the company's still solid core pharmaceutical business and significant financial flexibility, offset by its near-term challenges in expanding its product sales and the increased likelihood of major debt-financed product acquisitions.
Elan continues to focus on expanding its self-marketed drug portfolio that accounts for nearly 65% of the revenue base (excluding one-time product divestitures in 2001), with the rest produced from contract revenues. The company's drug portfolio is diverse, led by muscle spasticity treatment, Zanaflex; the pain medication, Skelaxin; and the invasive fungal treatment, Abelcet. Each of these products generates over $100 million in annual sales. In 2001, Elan divested a number of its smaller, slower selling products in order to increase its focus on its larger products.
A complete list of ratings is available to RatingsDirect subscribers at www.ratingsdirect.com, as well as on Standard & Poor's public web site at www.standardandpoors.com under Ratings Actions/Newly Released Ratings. |
