Spanish Gaming Company Defers Coupon Payment Amid Virus Lockdown
2020-04-28 10:54:15.603 GMT

By Irene García Pérez
(Bloomberg) — Spanish gaming company Codere SA became the
second European company to defer the payment of interest on its
bonds since the coronavirus lockdowns started in the continent.
The Madrid-based firm announced late Monday that it will
pay the 27.4 million euros ($29.72 million) coupons of its 500
million euros and $300 million notes that were due this Thursday
at the end of its 30-day grace period.
The measure was taken as part of the company’s contingency
plan in order to preserve liquidity position and ensure business
continuity, it stated in a filing.
Solocal Group, France’s former Yellow Pages, was the first
one to suspend coupon payments in March, arguing it saw a
potentially significant decrease in orders over the next weeks
due to the economic downturn.
About 1.3 billion euros of high-yield coupon payments on
bonds listed in the ICE Bank of America Euro High Yield index
are due before the end of May.
Amid the current pandemic more firms are likely to take
advantage of the grace period around coupon payments to seek
financial help, according to Benjamin Sabahi, head of Credit
Research at Spread Research.
“With Covid-19, you may find cases where companies find
liquidity from loans guaranteed by the state so they prefer to
wait,” he said. “Since we’ve got so many exceptional tools right
now in the markets, I would say it is quite likely that
companies could use the grace period more than in the past.”
While some companies, like French hotel group Accor, have
emphasized their commitment to pay their debt interest despite
the shutdown, others have started talks with creditors to
discuss options. That’s the case with foreign-exchange business
Travelex, which has a 14.4 million euro coupon due on May 15.
“We are continuing to have positive talks with creditors,”
a spokesman for Travelex said in an email statement in response
to a question over the company’s intention to pay the full
amount on time. Accor did not respond to a request for comment.
Here are the 10 biggest euro-denominated corporate non-
financial high-yield bond coupons due before the end of May,
according to date compiled by Bloomberg: