S&P upgrades Codere

S&P said it raised the long-term corporate credit rating on Codere SA to B from D as it has emerged from default.

The outlook is stable.

The agency also said it withdrew the D ratings on the company's senior unsecured notes.

The upgrade follows Codere's emergence from default and the implementation of its comprehensive financial restructuring, S&P explained.

Its post-emergence capital structure cancelled debt of about €555 million, the agency said, and its financial leverage is expected to remain at sustainable levels.

Codere further improved its liquidity position with cash on the balance sheet increasing to €320 million from about €115 million before the restructuring, S&P added.

The agency also said it strengthened its corporate governance when the Martinez Sampedro family reduced its ownership stake to about 20% from 70% previously. The board of directors also was reinforced with six new board members of nine total members, the agency said.

The ratings also consider the company’s weak business risk profile due to its substantial exposure to Latin America, particularly Argentina and Mexico, S&P said.

The ratings also recognize that Codere operates in a highly regulated business with strong barriers to entry, but includes regulatory risks that cannot be overlooked, the agency said.

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