Research Update: Spanish Gaming Company Codere S.A. Downgraded To 'CC' From 'CCC' On Liquidity Crisis; Outlook Negative

On Feb. 26, Codere S.A. announced that it is negotiating, with an ad hoc noteholder group (comprising noteholders of the group's super senior and senior notes outstanding), financial alternatives to reorganize its capital structure, ahead of its March 2021 coupon payment. We estimate that, as of the end of February 2021, Codere had around €70 million of cash in the bank, of which approximately €25 million is trapped cash or working capital; without an available revolving credit facility, we view this as an imminent liquidity crisis that is likely to lead to a restructuring. We therefore lowered to 'CC' from 'CCC' our long-term issuer credit rating (ICR) on Codere. At the same time we lowered the issue ratings on the

...- On Feb. 26, Codere S.A. announced that it is negotiating, with an ad hoc noteholder group (comprising noteholders of the group's super senior and senior notes outstanding), financial alternatives to reorganize its capital structure, ahead of its March 2021 coupon payment. - We estimate that, as of the end of February 2021, Codere had around 70 million of cash in the bank, of which approximately 25 million is trapped cash or working capital; without an available revolving credit facility, we view this as an imminent liquidity crisis that is likely to lead to a restructuring. - We therefore lowered to '##' from '###' our long-term issuer credit rating (ICR) on Codere. At the same time we lowered the issue ratings on the company's 250 million super senior notes to '###-' from '###+', and the 500 million and $300 million senior secured notes to '##' from '###'. - The negative outlook indicates that we could lower our ICR and issue rating on Codere should the group trigger a default, such...

Research Update