S&P: GameStop view to negative

Standard & Poor’s said it affirmed the BB+ corporate credit rating on GameStop Corp. and revised the outlook to negative from stable.

The agency also said it assigned a BB+ rating to the company’s proposed $400 million senior notes with a 4 recovery rating. The 4 recovery rating indicates 30% to 50% expected default recovery.

The proceeds will be used for future acquisitions and general corporate purposes, which may include dividends and share repurchases, S&P said.

S&P also said it affirmed the BBB rating on the company’s existing asset-backed lending revolver and the BB+ rating on the $350 million senior notes.

The agency said it revised the recovery rating on the senior notes to 4 from 3. The 4 recovery rating reflects 30% to 50% expected default recovery.

GameStop participates in the highly competitive and fragmented video game, consumer electronics and wireless services industries with a leading market position in its core pre-owned video game business, S&P said.

With a broad geographic footprint and strong brand recognition, the company continues to expand its product offerings into mobile wireless and consumer electronics services, the agency said.

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