Debt pressure sees Codere fight for survival 

Spanish business news sources have reported on the dire circumstances faced by Codere SA, as the company tries to keep its business afloat amid global COVID-19 disruptions.   

An embattled Codere has reportedly hired Bank of America to lead renegotiations of its long-standing €900 million corporate debt bonds with US investors. 

Taking on a high-risk client, Bank of America will have to convince Codere debt holders to extend 2021 debt maturity terms for a further two years. 

Complicating matters, global credit agency Moody has reclassified Codere bonds to a ‘CAA-1’ index, which brand the Spanish incumbent’s debt holdings as ‘junk bonds’ holding a ‘negative outlook for investors’.  

March trading saw Codere’s bond value plummet to from €0.90 to €0.35 cents, as the legacy Spanish gambling operator became the ‘most bet against’ company listed on the Bolsa Madrid Exchange. 

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

Further drastic actions have led Codere to place 1,000 of its Spanish staff under the government’s ERTE payroll protection program, with the gambling group also securing a €20 million credit line to protect its Mexican business unit. 

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 Spanish operator avoid bankruptcy.