Wed 02/10/2021 06:30 AM
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Spanish gaming company Codere is working with Houlihan Lokey and Clifford Chance on another round of debt talks with bondholders, which are working with PJT Partners and Milbank, sources told Reorg.

Due to the Covid 19-related restrictions in its main markets - Argentina, Mexico, Spain and Italy - the group’s liquidity is again under pressure, sources said. Continue reading for our EMEA Core Credit team's update on Codere's debt negotiations with bondholders and request a trial for access to our analysis and reporting on hundreds of other debt negotiations in the region.

Codere expected to have €40 million to €50 million of liquidity at the end of March and April 2021 after the coupon payments. As part of the group’s restructuring it has to maintain a minimum monthly liquidity covenant of €40 million in cash, cash equivalents and borrowings available under credit facilities.

Advisors are focusing on the company's new money needs and on how much debt the business is able to sustain, which will determine the type of deal it pursues, sources said.

Codere’s previous restructuring extended the debt maturities on the company’s senior secured notes for two years, hiked up interest rates and included new €250 million super senior notes at a 10.75% interest rate. The restructuring left Codere with a pro forma net leverage of 10.5x as of Sept 30.

As part of the company’s restructuring, the group’s €500 million senior secured notes were extended to November 2023 and the rate increased to include a mandatory 4.5% cash-pay component alongside a further 5% cash-pay or 6.25% PIK component. The $300 million senior secured notes were also extended to November 2023 and the rate was increased to include a mandatory 4.5% cash-pay component alongside a further 5.875% cash-pay or 7.125% PIK component. Management said it expected to continue to PIK part of the interest on its 2023 senior secured notes until the end of 2021 or until the market is normalized.










































































































































































Codere S.A. - Pro Forma as of 10/31/2020


09/30/2020

EBITDA Multiple

(EUR in Millions)

Amount

Maturity

Rate

Book


Non Guarantor Opco Debt

70.0



Total Non Guarantor Opco Debt

70.0

0.6x

Other OpCo Debt (excl. Capital Leases)

14.1



OpCo Capital Leases

5.0



€95M Super Senior RCF 1

-

Nov-01-2020

EURIBOR + 4.000%

€85M New Super Senior Notes

85.0

Sep-30-2023

10.750%

€165 New Super Senior Notes 2

165.0

Sep-20-2023

10.750%

Total Other Opco, Super Senior Debt

269.1

3.1x

€500M Senior Secured Notes 3

500.0

Nov-01-2023


$300M Senior Secured Notes 4

275.5

Nov-01-2023


Total Senior Secured Notes

775.5

10.1x

Capitalization of Operating Leases

195.0



Total Capitalized Leases

195.0

11.9x

Total Debt

1,309.6

11.9x

Less: Cash and Equivalents

(147.9)

Net Debt

1,161.7

10.5x

Operating Metrics

LTM Reported EBITDA

110.5


Liquidity

Plus: Cash and Equivalents

147.9

Total Liquidity

147.9

Credit Metrics

Gross Leverage

11.9x

Net Leverage

10.5x


Notes:
LTM EBITDA and Capitalized lease figures were not disclosed for the end of October thus Sept. 30 levels were used.
1. RCF was fully repaid from the €165M of additional new super senior notes.
2. Effective interest rate of 10.75%. The proceeds from this tranche to be used to refinance Codere’s existing €95 million super senior RCF and to provide further liquidity.
3. Maturity of these notes was extended to Nov 1, 2023 from Nov 1, 2021 and rate was increased to include a mandatory 4.5% cash-pay component alongside a further 5% cash-pay or 6.25% PIK component after the scheme of arrangement.
4. Maturity of these notes was extended to Nov 1, 2023 from Nov 1, 2021 and rate was increased to include a mandatory 4.5% cash-pay component alongside a further 5.875% cash-pay or 7.125% PIK component after the scheme of arrangement.
Pro Forma: Capitalization is pro forma for the completion of restructuring as of October 31. The group has a €40 million liquidity covenant which is tested monthly.



--Luca Rossi
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