Cash-generative businesses. Leading market positions and barriers to entry in gaming. Limited maintenance capital expenditure requirements. Highly leveraged financial profile. Weak liquidity and short-term refinancing requirement for senior bank facility. Negative earnings growth as a result of the recession in Spain. Substantial exposure to vulnerable Latin America economies (notably Argentina) with high regulatory and foreign-exchange risks, the latter partially hedged. Heavy indebtedness of controlling shareholders, via an outstanding payment-in-kind loan. The ratings on Latin American and Spanish gaming group Codere S.A. reflects its highly leveraged financial profile, negative earnings growth because of the deep recession in Spain, significant exposure to volatile Latin American economies, weaker liquidity and short-term debt maturities, regulatory risks, and the heavy indebtedness of controlling shareholders. These
