DBRS Downgrades the Ratings of Golf Town Canada Inc. & Golfsmith International Holdings, Inc. to D

DBRS Limited (DBRS) has today downgraded the Issuer Rating and Senior Secured Second Lien Notes rating of Golf Town Canada Inc. & Golfsmith International Holdings, Inc. (Golfsmith or the Company) to D and removed the ratings from Under Review with Negative Implications. DBRS has also discontinued-withdrawn the recovery rating on the Company’s Senior Secured Second Lien Notes.

The rating action follows the Company’s announcement on September 14, 2016, that it had commenced creditor protection proceedings under the Companies’ Creditors Arrangement Act in the Ontario Superior Court of Justice and a Chapter 11 case under title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware.

At the same time, the Company entered into a definitive asset purchase agreement for the sale of the Canada-based business of Golf Town Canada Inc. to an entity to be controlled by a purchaser group led by Fairfax Financial Holdings Limited (Fairfax) and certain investment funds managed by Signature Global Asset Management, a division of CI Investments Inc. (CI), referred to as the “Golf Town Transaction” in the Company’s press release. The Company also announced that it had entered into a support agreement with Fairfax and CI with respect to a recapitalization and restructuring transaction of the U.S.-based business of Golfsmith International Holdings, Inc., referred to as the “Golfsmith Transaction” in the Company’s press release.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link to the right under Related Research or by contacting us at info@dbrs.com.

The applicable methodologies are Rating Companies in the Merchandising Industry and DBRS Criteria: Recovery Ratings for Non-Investment Grade Corporate Issuers, which can be found on our website under Methodologies.

The rated entity or its related entities did participate in the rating process. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities.