S&P puts GameStop on watch

S&P said it placed GameStop Corp.’s ratings on CreditWatch with negative implications.

The agency said it had estimated a substantial majority of unsecured debt holders would tender their positions in the company’s exchange offer. However, GameStop reported 52.2% tendered their holdings.

“The CreditWatch placement indicates that we could lower the ratings following a review of GameStop’s financial policy around addressing its remaining approximate $200 million of unsecured notes due 2021, operating performance trends in light of Covid-19, long-term business prospects and capacity to reinvest in a turnaround given the lower exchange participation than we had previously contemplated,” S&P said in a press release.

S&P said it sees the possibility for the company to handle the remaining unsecured notes at less than par may have risen with the new board composition and lower participation in the exchange than had been expected.

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