Grifols; New Questions From Gotham Add Little To The Debate, We Feel.

Grifols (GRF SM); new comms from Gotham Research (the short seller) surrounding relationship with Scranton Enterprises. We don’t feel this raises anything new and shouldn’t impact the credit.

• Document basically asks further questions around the relationship between Grifols and Scranton, along with a range of questions around debt undertaken by these parties and the terms of this debt. In the normal course of investor communications, we have almost never seen such commercial terms outlined for a large, quoted company.
• Gotham does ask if an independent analysis can be done by a forensic accounting firm, rather than Baker McKenzie, which Grifols’ audit committee has maintained, describing it as a “law firm”. This may be true but it does have literature on its website specifically alluding to forensic accounting and has a whole investigations department (https://www.bakermckenzie.com/en/expertise/areasofpractice/investigations-and-whitecollar-crime )
• To recap, the key event is the closure of the sale of S-RAAS to Haier which enables the refi of the key ’25 bond (GRFSM 3.2 05/01/25) which has tightened significantly over the last month (OAS >200bp lower) following the initial short attack on 9-Jan.