Codere Bonds Climb to Five-Month High Amid Debt Talk Extensions

Codere SA’s bonds are heading for their biggest monthly increase in more than four years as the Spanish gaming company and its stakeholders extend talks to avoid insolvency.

Codere’s 660 million euros ($905 million) of 8.25 percent bonds rose as much as 14.8 cents on the euro to 58 cents since it won more time to negotiate a 1.1 billion-euro debt restructuring deal on April 30, according to data compiled by Bloomberg. The notes are little changed at 57 cents today.

The Madrid-based company, which has reported eight consecutive quarters of losses, is trying to avoid starting insolvency proceedings after seeking preliminary creditor protection in January. Codere’s lenders and a majority of bondholders agreed last night to extend talks for a fourth time, pushing the deadline for agreement until tomorrow evening.

“The company seems to have started being more constructive in regards to negotiations with the bondholders,” Stan Manoukian, founder of Independent Credit Research, wrote in a note to investors. If negotiations fail, “consequences will be devastating, and as such, we feel that ultimately, the deal will be accomplished,” he wrote.

About 95 percent of companies that enter insolvency proceedings, known as concurso under Spain’s bankruptcy laws, end up in liquidation, according to the Madrid-based Colegio de Registradores, which tracks company registrations.

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