The ratings on Spanish gaming company Codere S.A. reflect Standard&Poor's Ratings Services' view of its highly leveraged financial risk profile, after consolidating its shareholder payment-in-kind (PIK) loan. The ratings also reflect Codere's substantial exposure to Latin America, particularly to Argentina and Mexico, which we regard as generally subject to greater regulatory, foreign exchange, and labor-relations risks than its European operations. This is despite the currently more severe cyclical pressures in Spain. These weaknesses are somewhat mitigated by the company's cash-generative characteristics, leading market positions, and limited maintenance capital expenditure (capex) requirements. Codere operates gaming machines principally through gaming halls in Argentina, Mexico, and Italy, and bars in Italy and Spain. These countries contributed about 95% of Codere's EBITDA
