(Bloomberg) -- Grifols SA raised €1.3 billion ($1.4 billion) in a private debt placement as the Spanish drugmaker seeks to reassure investors about its ability to manage borrowings. The company’s stock and bonds climbed.
The notes were issued at 7.125% and are due in May 2030, with proceeds earmarked mostly to fully redeem notes due February next year and repay loans due in November, Grifols said in a regulatory filing late Wednesday. It also announced an 18-month extension to May 2027 of an existing revolving credit facility.
S&P Global Ratings on Wednesday raised the company’s rating by one notch to B+ from B, and said it expected the drugmaker to improve its free operating cash flow generation to around €400 million in 2025. Shares of Grifols, which have dropped 38% this year, rose as much as 9.2% to €9.648 in Madrid on Thursday. Bonds due in October 2028 rose around two cents on the euro in early morning trading.
The debt transactions mark a major attempt by Chief Executive Officer Nacho Abia to show investors that the company can control its leverage ratios and focus on cash generation. Grifols has been reeling since January, when it was targeted by US shortseller Gotham City Research, which criticized its corporate governance and accounts.
Abia became the first company outsider to be named CEO in April, when the board decided to remove all family members from executive positions after the Gotham report.
Brookfield Asset Management Ltd announced two weeks ago that it was shelving a plan to take over Grifols, which it had disclosed in July. The main reason for walking away was differences with the board over price. It planned to acquire Grifols in partnership with the family, who own about a third of the company.
In April, Grifols made a €1 billion private placement at 7.5% of notes due in 2030.
--With assistance from Eleanor Duncan.
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