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Credit Risk Movers and Shakers: Spain’s Codere S.A. Continues to Deteriorate

Spanish gaming company Codere, S.A. (CATS:CDR) was one of the three European companies with worst credit risk levels highlighted in our most recent issue of Credit Market Pulse.  Since the publication of the report, the credit picture for Codere, S.A. has deteriorated even further.  The company’s probability of default (PD) went from 30.98% as of August 29th to 48.06% as of October 14th touching over 50% at one point in late September (see chart below).  

Codere, S.A.: Market Signal Probability of Default vs. Stock Price Movement, Last Three Months

Source: Credit Analytics on the S&P Capital IQ platform, as of October 14, 2014. Light blue line represents stock price and dark blue line represents PD Market Signal.

On September 23rd, the company agreed to restructure 1.1 billion euros of debt with existing creditors who will take over 98% of the company, according to a statement on Codere’s website. The deal will result in a 675 million euros bond issuance to be used in exchange for 475 million euros in existing bonds and 200 million euros in capital.

This agreement clearly left the equity markets unhappy with the company. 

In the full Credit Market Pulse report, we highlight companies with the highest credit risk levels, biggest improvements and biggest deteriorations around the globe.  Credit risk levels are measured by our quantitative equity-based PD model ‘PD Model Market Signals’ which covers well over 99% of global market capitalization. The table below is from the report with data as of August 29th.

To find out more about all of the companies in our movers and shakers list, read the most recent edition of Credit Market Pulse here and sign up to receive future editions when they come out on a bi-monthly basis.

Click here to watch the Credit Market Pulse video.

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