Moody's lifts GameStop to SGL-1

Moody's Investors Service said it has upgraded the speculative grade liquidity rating of GameStop Corp. to SGL-1 from SGL-2 and affirmed the company's long-term debt ratings - corporate family rating at Ba3 and $950 million of senior unsecured guaranteed notes at Ba3.

The outlook remains stable.

Moody's said the upgrade to SGL-1 reflects the sizable improvement in GameStop's on balance sheet cash versus prior year levels as well as Moody's expectation for healthy free cash flow generation over the next 12 months.

The Ba3 corporate family rating is primarily reflective of the company's fairly high leverage that was incurred to finance its recent sizable acquisition of EBGames and is indicative of a Ba rating level.

Also weighing down the corporate family rating is the risk that the company's integration of the acquisition of EBGames does not proceed as planned exposing the company to potential business disruptions.

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