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Blackstone’s GSO Said to Cut Holding in Codere Loan to 20%

GSO Capital Partners LP reduced its holdings of a 127.1 million-euro ($174 million) loan to Spanish gaming operator Codere SA to about 20 percent, according to a person familiar with the matter.

The credit investment unit of Blackstone Group LP previously held about 50 percent of the credit facility, the person said, asking not to be identified because the details are private. Andrew Dowler, a London-based spokesman for Blackstone, declined to comment on the financing.

GSO and Canyon Capital Partners LLC are among lenders that have been negotiating with the Madrid-based company to restructure 1.1 billion euros of debt. Codere said Jan. 21 it may file for creditor protection if it fails to reach an agreement with bondholders, after exchanging about nine proposals.

Codere’s founding Martinez Sampedro family is fighting to retain as much control as possible of the company that’s reported losses for seven straight quarters. The operator of betting shops and race tracks from Italy to Argentina sought preliminary creditor protection on Jan. 2, giving the company as much as four months to reach a restructuring agreement.

Codere said Jan. 7 its lenders had extended the loan for 30 days and might give it until April 15 to repay the debt if the company reaches an agreement with bondholders. Under the extension agreement, it will pay an additional 1 percent on existing interest, the company said.

GSO provided the facility in June, including terms that gave it a guaranteed return on credit-default swaps. After Codere delayed an interest payment by two days in September to comply with the loan conditions, swaps were triggered allowing GSO to make at least 11.4 million euros, according to a person familiar with the situation and data compiled by Bloomberg.

To contact the reporters on this story: Luca Casiraghi in London at lcasiraghi@bloomberg.net; Abigail Moses in London at amoses5@bloomberg.net

To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net

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