Grifols: New Gotham Article Fails To Alter Calculus on S-RAAS Deal Driving '25 Refi Events

Grifols (GRF SM) has seen another Gotham article published this morning “How an advance payment becomes a loan Part I”. Much as this is a fun soap opera, Gotham’s claims appear increasingly immaterial and this does not alter the calculus on the key refi event (S-RAAS sale), in our view.

• Cash pooling with Haema and the link to Scranton. The company has now clarified this situation, but it is a fair question which calls into question a range of issues around vendor- and supplier-financing which are far from unique to Grifols. Related party transactions are an issue, but Grifols does appear to be moving in the right direction on this.
• RegFD compliance: Gotham makes a serious claim that Grifols is not in compliance with “fair disclosure” rules as Gotham appears to have learnt something from a sell-side research report. Quoting from the SEC, this pertains to “selective disclosure by issuers of material nonpublic information”. The entirety of the EUR321m pooling arrangement is 1.51% of Grifols’ Dec-23 total assets. The Corporate Finance Institute quotes 0.5% of total assets as material.
• What does all this mean? In short, this does nothing to alter the calculus around the refi of the ’25 notes via the S-RAAS deal closure.