Codere default seen lifting prospect

The company failed to repay the loan when it came due yesterday after it couldn’t reach agreement with bondholders over a USD 1.5 billion restructuring. Codere’s bonds dropped as much as 20 percent to 37 cents on the euros and were quoted at 41 cents at 12:36 p.m. in Madrid, according to Bloomberg bond prices.

Codere sought preliminary creditor protection on Jan. 2 and said it would file for full protection, known as a concurso in Spanish bankruptcy law, if it failed to reach a deal with bondholders.

The Madrid-based company, which manages betting parlors and race tracks in Spain, Italy and Latin America, continues to negotiate with lenders, according to a statement it filed last night.

“The immediate impact of this failure is to make a concurso process more likely,” said Aengus McMahon, a credit analyst at ING in London. “You still have to think that a deal can get done -- it’s a matter of how far anyone is willing to take the negotiations.”  Italo Durazzo, a spokesman for Codere, declined to comment on the loan default or the restructuring negotiations.

The company said its units are seeking preliminary creditor protection, according to a statement. They include Codere America, Colonder, Nididem, Codere Internacional Dos and Codere Internacional.