This excerpt taken from the ELN 6-K filed Apr 11, 2005.
In December 1998 Elan Finance Corporation issued, in a private placement and at a substantial discount, LYONs due 2018 in the principal amount of $1,643.5 million at maturity. The issue price of the LYONs was $524.78 per $1,000 principal amount at maturity and the gross proceeds to us amounted to $862.5 million. The expenses associated with the transaction amounted to $23.1 million. The LYONs are exchangeable at any time at the option of the holder into 13.75 Elan ADSs per each $1,000 principal amount at maturity. The securities are redeemable for cash at any time, at the option of Elan. Holders of the LYONs may require us to purchase all or any portion of their LYONs on 14 December 2008 and 14 December 2013 at a purchase price equal to the issue price plus all accrued original issue discount up to the purchase date. We may, at our option, elect to pay the purchase price for the LYONs in cash, by the delivery of ADSs, at then existing market prices, or any combination of cash and ADSs. Our right to pay the purchase price for the LYONs by delivering ADSs is subject to certain conditions, including the registration of the ADSs to be delivered under the Securities Act of 1933 and the listing of those ADSs on the NYSE.
Notes Relating to Financial Statements
In December 2002, we repurchased $318.6 million in principal amount at maturity of LYONs (representing approximately 19% of the originally issued LYONs) in separate privately negotiated purchases.
Through 3 June 2003, we repurchased an additional $523.7 million in principal amount at maturity of the LYONs (representing approximately 32% of the originally issued LYONs) in separate privately negotiated purchases.
On 14 November 2003, we announced that holders of the remaining outstanding LYONs had the right to surrender their LYONs for purchase during the period that began then and ended on 15 December 2003. Pursuant to the indenture under which the LYONs were issued in December 1998, each holder of LYONs had the right to require us to purchase on 15 December 2003, such holders LYONs at a price equal to $616.57 per $1,000 principal amount at maturity of the LYONs.
Under the terms of the LYONs, we had the option to pay for the LYONs in cash, in ADSs, representing Ordinary Shares, of Elan, or in any combination of cash and ADSs. We elected to pay for the LYONs in cash. The aggregate principal amount due at maturity for all outstanding LYONs was approximately $801.3 million.
On 16 December 2003, we announced that LYONs with an aggregate principal amount at maturity of approximately $799.7 million were validly surrendered for repurchase and not withdrawn, and we had repurchased all such LYONs. Approximately $0.9 million in aggregate principal amount at maturity of LYONs remain outstanding following the completion of the repurchase. The aggregate purchase price for all LYONs validly surrendered for repurchase and not withdrawn was approximately $493.1 million. The accreted value of the remaining LYONs was $0.9 million at 31 December 2004.
The original issue discount charged to income in the year to 31 December 2004 amounted to $Nil (2003: $19.1 million).
The liability outstanding at 31 December 2004, net of financing costs of $Nil (2003: $Nil), was $0.9 million (2003: $0.9 million) with interest accrued of $Nil (2003: $Nil).