Moody's rates Almirall notes Ba3

Moody's Investors Service said it assigned a Ba3 corporate family rating and a Ba3-PD probability of default rating to Almirall, SA and a provisional Ba3 rating to its proposed €325 million of senior notes due 2021. The outlook is stable.

The proceeds from the notes will primarily be used to refinance Almirall's existing bank debt, which was drawn in December to fund the Aqua Pharmaceuticals Inc. acquisition, purchased for $305 million, and to provide additional liquidity for the potential payment of up to $75 million of earn-outs in 2014 and 2015.

The agency said the Ba3 corporate family rating reflects the small size of the company compared to other rated pharmaceutical companies, the company's geographic concentration in Europe (73%), particularly in Spain (34%), and the reliance of the company on its Aclidinium Bromide respiratory franchise to grow revenues in which the company is facing the competition of "Big pharma" companies.

However, the rating also takes account of the company's currently strong product and therapeutic diversity, its limited exposure to patent expiries, the improved revenue growth outlook and geographic diversity brought by the acquisition of Aqua and the launch of its Aclidinium Bromide respiratory product for the treatment of COPD in a number of markets, its moderate debt leverage and the reasonably conservative financial policy of the company, Moody's said.

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