ICG leads largest mezz deal in Spain

Intermediate Capital Group has invested a total of E65m as part of a E210m financing package for Codere, a Madrid-based slot machine operator.

Intermediate Capital Group, the UK-listed provider of mezzanine financing has participated in what is Spain’s largest mezzanine financing to date, investing a total of E75m in Codere, an amusement machines operator based in Madrid.


In total, the financing package for Codere amounts to E210m, E75m of which comes in the form of senior facilities arranged by Bank of Scotland. The remaining E135m is being provided through mezzanine facilities arranged by ICG and Credit Suisse First Boston (CSFB). ICG has also invested E10m of equity capital of Codere.


Codere is one of the two leading Spanish operators of AWP slot machines, with activities in its home market as well as in Latin America. In 2002, the Group generated E353.8m in operating revenues and E76.2m EBITDA.


The transaction enables Codere to refinance its existing debt and to have additional cash for strategic expansion. Jose Vegas and Elena Gimeno from ICG led the transaction. CSFB’s Craig Klaasmeyer also worked on the deal, as did Juan Carlos Gabilondo and Javier Mellado from Bank of Scotland.


Codere is controlled by two family owners. In September 2002, Monitor Clipper Partners (MCP), a private equity firm formed by the strategy consulting firm Monitor Company, and the Clipper Group, another private equity operator, invested E40m of expansion capital to back Codere’s growth plans in return for a ten per cent stake.


For ICG, it is the first investment in Spain since assembling a Madrid-based team covering the Spanish market. According to a statement, the firm is planning to open a permanent office in Madrid by the end of 2003.


Earlier this year, the firm announced plans to launch a new European mezzanine fund, Mezzanine Fund 2003, with a target of E750m. Fundraising for a vehicle investing in Asia is also underway.