The ratings on gaming group Codere reflect its highly leveraged financial profile; significant exposure to volatile Latin American economies; high, albeit partially hedged, exchange-rate risks; and lack of direct ownership of licenses in certain jurisdictions, in addition to the heavy indebtedness of its controlling shareholders. These concerns are partly mitigated by the stable and cash-generative nature of Codere's Spanish slot (AWP) machine business, its strong record of EBITDA growth in Buenos Aires and Mexico, and the group's limited maintenance capital expenditure requirements and adequate liquidity. Codere remains highly leveraged. The group's adjusted-debt-to-EBITDA ratio at Sept. 30, 2006 (including the payment-in-kind [PIK] notes issued by related entity Masampe Holding B.V.) was 4.8x. Pro forma for the recent €160 million issue and
