Moody's downgrades Grifols

Moody's Investors Service said it lowered Grifols SA’s corporate family to B1 from Ba3 and its probability of default rating to B1-PD from Ba3-PD. The agency also trimmed the senior secured ratings of Grifols, Grifols World Wide Operations Ltd. and Grifols World Wide Operations USA, Inc. to Ba3 from Ba2 and Grifols' senior unsecured rating to B3 from B2.

“The downgrade to B1 and negative outlook reflect the announcement of Grifols' debt-funded acquisition of Biotest AG (Biotest) for an enterprise value of about €2 billion, which will further increase Grifols' already high leverage. Biotest is a German company that specializes in innovative hematology and clinical immunology solutions. Pro forma the acquisition, Moody's-adjusted debt/EBITDA amounts to 6.8x for the 12 months ended June 30, 2021, and Moody's would expect the company's leverage to improve to below 6x for it to be more comfortably positioned in the B1 rating,” the agency said in a press release.

Moody’s said it also considered the effects of the pandemic and the forecast that the low U.S. plasma collection volumes in the first half of 2021 and high donor fees will continue to hurt Grifols' revenue and cash flows in the next 12 to 18 months, keeping its leverage elevated.

The outlook is negative.

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