S&P reviews Almirall

Standard & Poor's said it placed its BB- long-term corporate credit rating on Almirall SA on CreditWatch with developing implications.

At the same time, the agency placed its BB- issue credit ratings on the company's €325 million senior unsecured notes on CreditWatch developing. The recovery rating of 3 indicates an expectation of meaningful recovery (50%-70%) in the event of a payment default.

S&P said the CreditWatch placement follows Almirall's unexpected July 30 announcement that it sold key parts of its respiratory division to AstraZeneca plc for an upfront payment of $875 million.

The agency understands there is a potential further $1.2 billion related to meeting certain milestones, as well as royalty payments mainly from the pulmonary disease treatment Eklira.

Although the transaction could lead S&P to revise its assessment of Almirall's business risk profile to "weak" from "fair," it may strengthen Almirall's financial risk profile, depending on management's future financial policy.

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