Fitch rates Grifols BB-, new notes B+

Fitch Ratings said it assigned a long-term issuer default rating of BB- to Grifols, SA and its subsidiaries Grifols Worldwide Operations USA, Inc. and Grifols Worldwide Operations Ltd. The outlook is stable. Fitch also gave Grifols' senior secured debt ratings of BB+/RR2, and ratings of B+/RR5 to senior unsecured debt issued by Grifols' subsidiaries, and an expected B+(EXP)/RR5 rating to the new €2 billion senior unsecured note to be issued by Grifols.

“Grifols' BB- IDR reflects its strong business profile underpinned by sizeable cost-efficient operations, leading global market positions across its core plasma-derived medical products and healthy operating and cash flow margins. However, the IDR is strongly constrained by a high financial leverage given aggressive financial policies and the debt-funded expansion strategy,” Fitch said in a press release.

The outlook reflects a forecast of dynamic deleveraging in 2023 and 2024 following very high leverage in 2021 and 2022 due to a pandemic-driven hit to operating underperformance and the acquisition of Biotest AG, the agency said.

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