Moody's downgrades Codere

Moody's Investors Service said it downgraded Codere SA's corporate family rating to Ca from Caa3 and its probability of default to C-PD from Caa3-PD. The C-PD reflects the view default is imminent, citing the lock-up agreement reported Thursday.

Concurrently, Moody's also lowered the instrument ratings on the €500 million and $300 million senior secured notes both due 2023 to Ca from Caa3 and the €250 million super senior notes due 2023 to Caa1 from B3, all three issued by Codere Finance 2 (Luxembourg) SA. In parallel, Moody's assigned a Caa1 rating to the proposed €100 million bridge notes due 2026 that will be issued in two tranches by Codere Finance 2. The agency changed the outlook to negative from stable.

On Thursday, Codere announced an agreement for the terms of a proposed restructuring with an ad hoc group of bondholders, which includes issuing €100 million bridge notes, that are pari passu with the existing super senior notes. As part of the proposed restructuring, the €500 million and $300 million of senior secured notes will be exchanged into €135 million and $81 million reinstated senior secured notes, €226 million subordinated PIK notes and 95% of the share capital of the New Topco.

“Moody's will likely consider the maturity extension on the super senior notes and the debt-for-equity swap on the senior secured notes as a distressed exchange,” the agency said in a press release.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.