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Biotech / Medical : T/FIF, a New Plateau -- Ignore unavailable to you. Want to Upgrade?

To: scaram(o)uche who wrote (945)	2/6/2002 11:54:52 PM
From: scaram(o)uche	Respond to of 2243

emphasis mine..... elan.com Frequently Asked Questions – Debt/Cash (1) How Much Cash and Liquid Resources Does Elan Have? Excluding the QSPEs, Elan has, as of December 31, 2001: US GAAP Cash $1,663m Managed Funds $170m Quoted Equities $370m Total $2,203m In addition : (a) Elan had other equity and debt investments, in both public and private companies, of $973m on its US GAAP balance sheet, as of December 31, 2001; (b) The QSPEs had investments and cash of approximately $1,000m, of which cash was $160m, as of December 31, 2001. Elan has a significant amount of cash resources. (2) What debt does Elan have? The following lists all debt outstanding, including the QSPEs, and its maturity date: 2002 8.43% Guaranteed Notes Due 2002 $160m 3.5% Debt Due 2002 $62m 2004 9.56% Guaranteed Notes Due 2004 $450m Revolving Credit Facility Due 2004 $325m 2005 7.6% Guaranteed Notes Due 2005 $390m 2008 7.25% Senior Notes Due 2008 $650m Sub-total $2,037m 3.25% Zero Coupon Sub Exchangeable $951m Notes Due 2018 Total $2,988m The Zero Coupon Sub Exchangeable Notes Due 2018 are shown separately as they are not expected to be repaid in cash. They are repayable on December 14, 2018. They are convertible into common shares. The note holders can also put their Notes to the company on December 14, 2003; or December 14, 2008; or December 14, 2013. If put, Elan can repay a Note in either shares or in cash, at Elan’s option. (3) What are the QSPEs? Elan has two QSPEs. The QSPEs are securitizations. They hold investments primarily in equity instruments. The QSPEs have issued debt to note holders. The investments are in emerging biotechnology and pharmaceutical companies. The investments are held in trust for the holders of the loan notes. Elan has given subordinated guarantees to the note holders of the QSPEs. Upon maturity of the notes, if the investments are insufficient to repay the debt, Elan is liable for the residual. If the investments are more than sufficient to repay the debt, Elan gets the surplus residual. Elan gets independent valuations of the investments, and currently the investments are expected to be sufficient to repay the debt. The QSPE loan notes are already listed above in answer 2 (all debt is included in answer 2) but to repeat: 2002 8.43% Guaranteed Notes Due 2002 $160m 2004 9.56% Guaranteed Notes Due 2004 $450m 2005 7.62% Guaranteed Notes Due 2005 $390m (4) How does Elan account for the QSPEs Irish GAAP consolidates the securitisation structures. It shows both the investments and related debt on balance sheet, and includes the interest charge related to the debt in the profit and loss account. The QSPEs were disclosed in Elan’s annual report for last year. Elan excludes this debt, investments and the interest charge from its financial data as prepared under US GAAP. (5) Does Any Of Elan’s Debt Have Covenants Related To Debt Ratings etc.? No. None of Elan’s debt has covenants relating to the rating of its debt. Elan’s covenants are plain vanilla covenants relating to EBITDA/Net Interest Payable and Total Senior Debt. (6) Does Elan Have Any Risk Of Breaching These Covenants? No. Elan believes it has plenty of headroom in both of these covenants.