S&P rates Grifols notes B+

S&P said it assigned a B+ rating and 6 recovery rating to the proposed €1 billion senior unsecured notes to be issued by Grifols SA.

The 6 recovery rating indicates 0 to 10% expected default recovery.

This reflects the subordination of the notes to the senior secured loans in the company's capital structure and their unsecured nature, S&P said.

The BB rating and 3 recovery rating on the existing $6.3 billion senior secured loans issued by Grifols, Grifols WorldWide Operations Ltd. and Grifols WorldWide Operations USA Inc. are unchanged. The 3 recovery rating indicates 50% to 70% expected default recovery.

The proceeds will be used to refinance the company's existing $1 billion senior unsecured notes, originally maturing in 2022, S&P explained.

The agency said it believes the recovery prospects are subject to Grifols' post-default exposure to both the Spanish and U.S. insolvency regimes.

Although the group is headquartered in Spain and the debt is guaranteed by the Spain-based parent, Grifols has substantial operations and assets in the United States, where most of the debt is located the agency said.

S&P said it believes that an insolvency filing, if required, could occur in the United States rather than in Spain.

Therefore, the insolvency regimes in both Spain and the U.S. are viewed as favorable for creditors, the agency said.

The ratings reflect the company's satisfactory business risk profile and aggressive financial risk profile, S&P said.

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