Codere cancels debt repayments to review crisis options

Embattled Bolsa Madrid gambling group Codere SA has postponed payments on its debt tranches of €500m and $300m, as corporate governance reviews the firm’s long-term financing options.

Yesterday, Codere made its decision public via a corporate filing with Spain’s competition and markets authority (CNMV).

In its notice, Codere informed that its suspension of debt payments formed part of group-wide contingency plans, with the company seeking to maintain corporate liquidity across all operating markets.

Supporting the firm’s continuity program during the COVID-19 lockdown, Codere seeks to raise a further €100m in working capital, which will be combined with its existing €130m credit facility.

Codere underlines its commitment to keeping its land-based gambling portfolio afloat across all European and South American markets, and is reportedly eyeing a staggered mid-May to June reopening for its business units (subject to regulatory approval).

Fighting for its survival, at the start of April Codere sanctioned Bank of America to lead renegotiations with US bondholders for a further two-year extension on debt maturity terms which will expire in 2021.

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.

Credit agency Moody’s was forced to downgrade Codere bond status to a CAA1 classification, branding the firm’s debt options as ‘high risk junk bond’ holding a negative outlook for investors.

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