Fitch downgrades Codere

Fitch Ratings said it downgraded Codere SA's issuer default rating to CC from of CCC and €250 million super senior notes to CCC-/RR3 from CCC+/RR3. Fitch also lowered Codere's senior secured notes, comprising a €500 million and $300 million tranche, to CC/RR4 from CCC/RR4.

“The ratings reflect Fitch's view that a liquidity crisis is imminent. The resurgence of the pandemic in Europe and Latin America since October has delayed operational recovery and accelerated and increased funding needs. Based on its latest trading update, Codere's current balance sheet resources may be exhausted within the next two months,” the agency said in a press release.

Fitch noted Codere's ability to meet its March 2021 coupon payment on the super senior notes is uncertain. “Even if Codere raises interim funding to allow for the next coupon payment, it will likely take the form of additional indebtedness on an already highly leveraged balance sheet. Despite the gradual return to operations in 2021, we view a restructuring of the capital structure as unavoidable,” the agency said.

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