Codere fights for survival as debt bonds are classified to junk status

Codere SA is reported to be fighting for its survival, seeking new investment options to refinance its long-standing €900 million corporate debt bonds.

Spanish business news source El Confidencial has reported that the Spanish gambling group has sanctioned Bank of America to lead renegotiations with bondholders for a further two-year extension on debt maturity terms which are set to expire in 2021.

Bank of America will have to convince Codere debt holders to maintain their investments within the company, having seen bond values plummet to from €0.90 to €0.35 cents.

Closing March trading, Moody’s downgraded Codere bonds to a ‘CAA1 classification’, the solvency ranking used to describe a ‘high risk junk bond’ which holds a negative outlook for investors.

Further hampering Codere’s refinancing options, the gambling group is reported to be the most bet against company listed on the Bolsa Madrid Exchange.

Codere’s €900 million long-term debt has been primarily amassed as part of the firm’s 2015 restructuring led by US private equity firms, which saw the legacy operator avoid bankruptcy.

Mirroring industry developments, COVID-19 disruptions have seen Codere temporarily shut down its entire land-based gambling profile operating in Spain, Argentina, Italy, Colombia, Mexico and Uruguay.

Drastic actions have led to Codere governance placing 1,000 of its Spanish staff under the government’s ERTE payroll protection programme.