Codere Starts Negotiations for New Round of Debt Talks as Liquidity Under Pressure; Company Working With Houlihan Lokey, Clifford Chance; Bondholders With PJT, Milbank

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.

--Luca Rossi