Elan shares slipped further yesterday as analysts digested the move by Standard & Poor's to cut its rating on the company.

The move, hours after Elan stunned the market with an announcement that it was seeking an extension on its deadline for filing its 2002 figures with the Securities and Exchange Commission (SEC), has increased the pressure on the company to reach agreement with the SEC before mid-September.

While Elan's debt was already rated in the "junk" category, the further downgrading will make holders of $650 million (€569 million) in senior debt more likely to trigger demand for payment. That would happen if Elan failed to provide full accounts by September 14th.

Such a move is widely seen by analysts as terminal for the company.

On the upside, the consensus feeling is that holders of EPIL debt, who can demand repayment of about $840 million in debt, if the results are not filed by the end of July, will waive their right to do so.

The EPIL bonds are subordinate to the senior notes and any move by them to seek payment would trigger payment of the senior debt, leaving little for the holders of the EPIL notes.

"Elan now has two months' leeway to sort out the SEC issue," said Goodbody analyst Mr Ian Hunter, "and judging by the tone of [chief executive, Mr] Kelly Martin in Thursday's conference call, he intends that it will be sorted out by then.

"This is his reputation that is at stake as well."

ABN Amro's Mr Liam Boggan pointed out that Mr Martin had recently invested heavily in Elan stock, a move unlikely if Thursday's announcement had been expected.