S&P gives Codere notes CCC, CCC+

S&P said it assigned its CCC issue ratings to Codere Finance 2 (Luxembourg) SA’s outstanding €500 million and $300 million of senior secured notes. The recovery rating is 4, indicating a forecast of average recovery (30%-50%; rounded estimate: 40%) in default.

Additionally, the agency gave its CCC+ issue ratings to Codere Finance 2’s €250 million super senior secured notes due 2023. The recovery rating is 2, indicating an expectation of substantial recovery (90%-100%; rounded estimate: 85%) in default.

S&P said the recovery ratings on the senior secured notes are constrained by the significant amount of prior-ranking claims under the new structure put in place in November, following the completion of its debt restructuring.

The recovery rating on the super senior secured notes is supported by their priority claim on the security package in the event of enforcement. “However, we see the recovery prospects of the super senior debt as limited by Codere’s significant exposure to guarantors in less creditor-friendly jurisdictions such as Argentina, Colombia, Mexico, and Panama. This exposure caps our recovery at 2,” S&P said in a press release.

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