Spanish Gaming Firm Defers Coupon Payout After Virus Lockdown

(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 to investors 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 will be paying the full amount for the coupons of the two perpetual bonds due Thursday as scheduled, a spokeswoman of the company said in an emailed statement.

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:

CompanyCouponDue Date
Casino Guichard Perrechon

EU23.5m

EU35.7m

May 15

May 26

Netflix

EU23.6m

EU25.4m

May 15

May 15

Kantar

EU19.8m

EU28.8m

Apr. 30

Apr. 30

EDPEU45mApr. 30
Kraft Heinz Foods

EU8.3m

EU28.1m

May 24

May 25

Telecom ItaliaEU36.3mMay 25
Accor

EU13.1m

EU21.9m

Apr. 30

Apr. 30

Bausch Health CompaniesEU33.8mMay 15
Refinitiv

EU12.5m

EU19.4m

May 15

May 15

Jaguar Land Rover

EU17.2m

EU14.7m

May 15

May 15

©2020 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.