Research Update: Germany-Based Grünenthal Pharma GmbH&Co. KG And Its Notes Assigned 'B+' Rating; Outlook Positive

Grünenthal Pharma GmbH&Co. KG (Grünenthal), through its subsidiary Grünenthal GmbH, has completed the partial refinancing of its capital structure, raising a total of €650 million in new senior secured notes. Post-transaction closing, Grünenthal will benefit from a long-dated capital structure, with no refinancing needs until 2024, and we project that it will be able to keep generating healthy free operating cash flow (FOCF). A concentrated and mature product portfolio constrains Grünenthal's earnings capacity, and this necessitates continued investments. There is also some uncertainty around generic competition for its top-selling drug, Palexia. We assigned our 'B+' long-term issuer credit rating to Grünenthal and our 'B+' issue ratings to the €400 million senior secured notes due 2026 and €250 million

...- Grnnenthal Pharma GmbH & Co. KG (Grnnenthal), through its subsidiary Grnnenthal GmbH, has completed the partial refinancing of its capital structure, raising a total of 650 million in new senior secured notes. - Post-transaction closing, Grnnenthal will benefit from a long-dated capital structure, with no refinancing needs until 2024, and we project that it will be able to keep generating healthy free operating cash flow (FOCF). - A concentrated and mature product portfolio constrains Grnnenthal's earnings capacity, and this necessitates continued investments. There is also some uncertainty around generic competition for its top-selling drug, Palexia. - We assigned our 'B+' long-term issuer credit rating to Grnnenthal and our 'B+' issue ratings to the 400 million senior secured notes due 2026 and 250 million senior secured notes due 2028. - The positive outlook indicates that we could raise the ratings over the next 12-18 months if the uncertainty around Palexia abates and we observe...

Research Update