Moody's rates K2 notes Ba3

Moody's Investors Service said it assigned a Ba3 first-time senior implied rating to K2 Inc. and assigned a Ba3 rating to its proposed $150 million senior unsecured notes due 2014. In addition, K2 was assigned a speculative grade liquidity rating of SGL-2.

The outlook is stable.

Moody's said the long-term debt ratings reflect K2's moderate leverage profile on a pro forma basis, its diversified portfolio of leading brands, and its strong customer relationships. The ratings also consider the risks inherent in K2's aggressive acquisition strategy in the sporting goods industry, which in turn is characterized by significant competition, low overall growth, and demand volatility in certain categories.

Proceeds from the notes offering, along with an expected (but not contingent) $75 million equity offering will be used to finance K2's recently announced acquisitions of Volkl Sports Holding AG, Marker Group and Marmot Mountain Ltd. Total consideration for the acquisitions will also include K2 common stock and the assumption of debt.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.