Grifols: CNMV Report Relatively Clean, Credit Positive

Grifols headlines appear to indicate a relatively clean bill of health from Spanish regulator (GRF SM).

*Grifols’ Financials Have No Big Errors, Spain Regulator Says (1) - bbg

• Terms like “no significant errors” and no evidence that “the leverage ratio… isn’t aligned with reality” are likely to drive positive spread moves today, we feel.
• It’s not a total clean bill, however – the regulator has found some “relevant deficiencies” in some of the alternative performance measures (which any smart investor normally treats with a pinch of salt anyway). Doubtless, Gotham will publicise this point widely. GRF has 15 days to fix these measures and has stated it is committed to “improving… disclosures”.
• The key here is that the two ’25 bonds that are key to this situation remain contingent on the successful closure of the S-RAAS stake sale to Haier. At the last statements on this deal (29-Feb and 1-Mar) indications were that the deal was simply awaiting regulatory approval and should close during 1H24.