The credit rating agency S&P Global has downgraded Codere's rating for the fourth time in eight months, considering that it has a very weak credit rating and is in danger of defaulting on its debts in the next six months.
The first downgrade in this rating occurred in October 2019, when it switched from B to B-, shortly after the Spanish multinational in the private gaming sector announced that financial inconsistencies could affect its full-year results.
In March, Codere was transferred from B- to CCC +, before being downgraded to CCC again in late April.
Now, S&P has lowered the operator's credit rating to CCC-, which means high levels of debt that pressures liquidity and agreements with creditors, without neglecting that the company depends on both favorable business and operating conditions in order to fulfil the terms of its liabilities.
However, S&P noted that Codere paid its last bond payment in May and understands that the operator is planning additional top-ups to increase liquidity.
Thus, Codere reported in May that revenue fell 21.3%, or € 278.5 million in the first quarter of 2020, while a combination of retail closings due to Covid-19 and land exchange rate fluctuations contributed to losses rising to € 97.1 million
In this scenario, S&P Global explained:
“ The negative outlook reflects our view that a default, either conventional or through a distressed exchange or restructuring, is increasingly likely in the next six months, absent unanticipated favorable developments, while the company also faces a potential liquidity shortfall or covenant breach if not adequately addressed."
18+ | Juegoseguro.es – Jugarbien.es
