Research Update: Spanish Gaming Company Codere Downgraded To 'B-' From 'B' On Refinancing Risk; Outlook Negative

Codere has launched an investigation into the reporting of its Latin American subsidiaries. This comes after it discovered accounting inconsistencies that could see its latest half-year financial results being overstated by up to €13 million-€18 million on an EBITDA basis (based on preliminary estimates). In our view, this may delay its refinancing prospects. On Sept. 10, 2019, we placed Codere on CreditWatch with negative implications on potential refinancing difficulties resulting from the devaluation of the Argentine peso and developments regarding government policy and capital controls We are now lowering to 'B-' from 'B' our issuer credit rating on Codere as well as the issue ratings on its €500 million and $300 million senior secured notes. The negative outlook reflects that

...- Codere has launched an investigation into the reporting of its Latin American subsidiaries. This comes after it discovered accounting inconsistencies that could see its latest half-year financial results being overstated by up to 13 million-18 million on an EBITDA basis (based on preliminary estimates). In our view, this may delay its refinancing prospects. - On Sept. 10, 2019, we placed Codere on CreditWatch with negative implications on potential refinancing difficulties resulting from the devaluation of the Argentine peso and developments regarding government policy and capital controls - We are now lowering to 'B-' from 'B' our issuer credit rating on Codere as well as the issue ratings on its 500 million and $300 million senior secured notes. - The negative outlook reflects that we could lower the ratings in the next 12 months if Codere does not successfully refinance its November 2021 notes or if its liquidity deteriorates....

Research Update