S&P rates new Global Motorsport notes B-

Standard & Poor's said it assigned its B- rating to Global Motorsport Group Inc.'s privately placed Rule 144A $85 million senior secured notes due 2008 and its B- corporate credit rating to the company.

The outlook is negative.

Issue proceeds will be used to refinance the company's existing credit facility and add to cash balances.

S&P said the rating reflects the company's historically volatile operating performance and discretionary cash flow, as well as its high debt leverage. Global Motorsport's market share is only about one-third of the size of Harley-Davidson Inc.'s parts and accessories business. Harley-Davidson only sells parts and accessories through its network of exclusive dealers, thus leaving a market niche of independent dealers for Global Motorsport to exploit.

The ratings outlook is negative. S&P said the company will need to continue to turn around its operating performance and generate positive discretionary cash flow to reduce its debt leverage. Additionally, the company is addressing concerns raised by its auditors. Failure to correct these material weaknesses could have a material adverse effect on its business and financial condition.

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