S&P downgrades Codere Luxembourg 2

S&P said it downgraded Codere Luxembourg 2 Sarl’s issuer rating to SD, selective default, from CC and super senior and senior notes to D from CC and C, respectively. The agency also affirmed the CCC- rating on Codere’s planned €100 million of first-priority notes.

“The downgrade to SD reflects that Codere has elected to further defer the coupon payments currently outstanding for both the super senior and senior notes, beyond the grace period, in agreement with the bondholders. Codere was due to pay €14.8 million on its super senior notes due March 31, 2023, and €2.3 million on its senior notes due April 30, 2023. We view this as a breach of a stated promise on a financial obligation under the timeliness standard, despite bondholders having consented to this extension, among other considerations in the indenture,” S&P said in a press release.

Additionally, the agency said it considers Codere’s planned restructuring distressed and equivalent to a default; however, it plans to raise the ratings once the restructuring becomes effective and a new capital structure is in place.

S&P noted the lock-up agreement was extended to a long-stop date of Oct. 27.

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