Elan retires over $240 million of its debt

Elan Corporation announced today the it has retired $211

Elan Corporation announced today the it has retired $211.8 million of its 2008 outstanding debt and has agreed to retire another $31 million in the next few days.

The pharmaceutical company's cash balance will be reduced by about $80 million but will remain in excess of $1.3 billion.

Elan's chief financial officer, Shane Cooke, said "these transactions will result in no additional dilution to our shareholders and will reduce our annual interest cost by about $16 million."

In a statement the company said it had purchased $175.0 million, and agreed to purchase a further $ 31.0 million in aggregate principal amount of 6.5 per cent Convertible Guaranteed Notes for approximately $255 million, representing an average premium of about 4 per cent to the market price.

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It also said it purchased $36.8 million in Athena Notes, leaving $613.2 million outstanding.

As a result of these transactions, Elan will record a net charge of approximately $53 million in the second quarter of 2005, of which approximately $48 million will be cash and approximately $5 million will be non-cash unamortized financing costs.