Moody's rates GameStop notes Ba3

Moody's Investors Service said it assigned Ba3 first-time ratings to GameStop Corp.'s corporate family rating and its initial $950 million senior unsecured guaranteed notes, including its $300 million of senior unsecured guaranteed floating rate notes due 2011 of Ba3 and its $650 million of senior unsecured guaranteed fixed rate notes due 2012, in connection with its proposed merger with Electronics Boutique Holding Corp.

The outlook is stable.

Moody's said the total consideration paid for Electronics Boutique will be about $1.4 billion, consisting of $985.5 million in cash payments and $419.7 million in GameStop common stock.

The agency also assigned an SGL-2 speculative-grade liquidity rating.

The Ba3 corporate family rating reflects the company's leverage levels post merger, the risks associated with the integration of the two companies, as well as the competitive landscape of the video game retail industry, which includes much larger and stronger capitalized companies including Wal-Mart, Target and Best Buy, the agency noted.

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