Moody’s drops Sports Authority, loan to Caa1

Moody's Investors Service said it downgraded Sports Authority Inc.'s corporate family rating to Caa1 from B3 and probability of default rating to Caa1-PD from B3-PD.

The agency also downgraded the company's $300 million senior secured term loan to Caa1 from B3.

The outlook is negative.

Moody’s said the downgrade of the corporate family rating to Caa1 reflects Sports Authority's weak liquidity stemming from the need for the company to address near-term debt maturities.

The Caa1 rating on the senior secured term loan reflects its junior position to the $650 million ABL, which has a first lien on the company's more liquid assets. The rating is also supported by the cushion provided by more junior claims in the capital structure, including $343 million of subordinated notes.

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