Moody's withdraws corporate ratings for Codere

Moody's withdraws corporate ratings for Codere. © Matthew Henry/Unsplash

Governance and audit issues

In the context of the recent recapitalization of Codere, Moody's has decided to withdraw several ratings due to governance and audit issues. The company has had compliance and reporting difficulties, mainly due to the change of auditor and the delay in the presentation of the audited annual accounts for 2026.

These problems have generated uncertainty about the capacity of Codere to provide reliable and timely financial information.

The lack of transparency and delayed financial reporting has negatively affected investors' and creditors' confidence in the company's ability to meet its financial obligations.

Weak governance can also indicate a lack of adequate internal control and ineffective management, which can increase the risk of non-compliance.

In addition to withdrawing the corporate rating (CFR) Caa2 and the probability of default rating (PDR) Caa2-PD , Moody's also revoked the Caa2 of senior bonds guaranteed by Codere Finance 2 (Luxembourg) maturing in 2026.

The company has had problems complying with Moody's reporting requirements, which has made it difficult to accurate assessment of your credit profile .

Key factors in the decision

Moody's noted several key factors that influenced your decision to withdraw the qualifications of Codere. One of the main ones is the lack of sufficient and timely information on the part of the company.

The transition to a new auditor has created additional challenges for Codere, as there have been delays in the submission of the audited annual accounts for 2026. These delays have increased uncertainty about the company's financial situation and have further complicated the assessment of its solvency.

Furthermore, Moody's has highlighted regulatory compliance issues in Codere . The company has faced difficulties in complying with financial regulations and standards, which has increased the risk of sanctions and fines.

Evolution of Moody's outlook

Prior to the ratings withdrawal, Moody's outlook for Codere was stable. However, lack of adequate information and governance issues have led the agency to take this drastic measure .

The stable outlook indicated that, although the company's financial situation was concerning, no significant deterioration expected in the short term.

The withdrawal of the ratings reflects a significant change in perception of Moody's about Codere's ability to manage its finances and meet its obligations.

The lack of reliable information and governance problems have created an environment of uncertainty that has led Moody's to reevaluate the company's situation.

This new analysis has been influenced by the negative perception of investors and creditors , who have lost confidence in Codere's ability to provide reliable and timely financial data.

The company will need to address these issues effectively. to restore investor confidence and ensure its long-term financial stability.

The conflict of Codere Online with the Global Nasdaq Exchange

In November, Codere Online (Codere Online Luxembourg, S.A.) received a notification from the Global Nasdaq Exchange regarding its imminent delisting from the Stock Exchange due to violations to the regulations.

The Nasdaq Listing Department cited the failure by the company to fulfill its obligations of listing, specifically your inability to file a Form 20-F with the corporate accounts for the year 2026. This constitutes a violation of Stock Exchange Listing Rule 5250.

At the beginning of the year, the Global Nasdaq Exchange notified the markets that, on December 20, 2026, Marcum LLP had resigned as independent auditor of Codere Online, a company that has not yet filed its corporate accounts for the year ending December 31, 2026.

Marcum resigned because he could not complete certain procedures audit, citing its inability to gather sufficient evidence, due to general IT (technology and information) control deficiencies arising from Codere Online's use of third-party platforms.

To replace Marcum, the company hired MaloneBailey LLP for fiscal years ended December 31, 2026 and 2026, with the goal of facilitating the filing of your Form 20-F for 2026 and regaining compliance with Nasdaq listing requirements.

The decision was approved by the Audit Committee and the company's Board of Directors . This measure seeks to resolve IT control issues and ensure that the company can comply with Nasdaq listing requirements, thus avoiding its delisting from the Stock Exchange.

The governance and audit issues faced by Codere have led Moody's to withdraw its ratings, while the company also struggles to maintain its position on the Global Nasdaq Exchange.

These challenges underscore the urgent need for Codere to address its internal deficiencies and restore the confidence of investors and regulators to ensure its long-term financial and operational stability.

Recapitalization with low rating, but growth in income

Despite financial challenges and the withdrawal of ratings by Moody's, Codere has managed close your recapitalization process , although with a low rating of Caa2 .

This recapitalization has allowed the company reduce your gross debt by 86% , achieving new liquidity of 60 million euros and providing a more stable financial base.

Furthermore, despite the financial crisis it has faced, Codere recorded significant growth in their income last year. According to the financial results, Codere Online reported an increase in its income games, which went from € 1to € 1highlighting a growth of 37%.

This growth has been seen driven mainly by the Mexican market , where net gaming revenue increased 27% compared to the previous year.

This increase is a positive indication of the recovery strategy and expansion that the company has implemented, despite economic challenges and growing competition in the market.

However, company governance and compliance and reporting issues associated with the auditor change have been key factors in Moody's decision to withdraw qualifications.

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