Moody's may upgrade Hockey

Moody's Investors Service said it placed the ratings of The Hockey Co. on review for possible upgrade following the announcement that the company will be acquired by Reebok (Baa3 - senior unsecured rating).

Affected by this action are the $125 million senior secured notes due 2009 at B2; the senior implied rating of B2; and the senior unsecured issuer rating of B3.

Reebok announced that it intends to acquire The Hockey Co. through an equity tender offer valued at about $204 million, plus the assumption of $125 million in debt. Both companies' boards of directors have approved the transaction, as has The Hockey Co.'s leading shareholder, Wellspring Capital Management.

The acquisition is likely to require a change-of-control offer for the notes, as governed by the indenture.

Moody's said its review will focus on ultimate resolution of the tender offer, including position and standing of The Hockey Co.'s debt within the combined legal and capital structure of Reebok. Further, Moody's will evaluate the strategic and financial plans for The Hockey Co. under its new owners, and expectations for operating performance given recent favorable trends and potential risks going forward related to challenges facing the NHL.

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