U.S.-based action sports apparel company Boardriders Inc. recently published preliminary results showing severely negative EBITDA in the second fiscal quarter. The company also indicated that it might need additional liquidity this year to meet its obligations. We believe that the company's capital structure is currently unsustainable and that it will likely need to raise additional debt or equity to improve liquidity. As a result, we are lowering our ratings, including our issuer credit rating on Boardriders, to 'CCC+' from 'B-'. The negative outlook reflects the possibility that we will lower our rating on Boardriders if we believe the risk of a near-term default has increased, including a high likelihood of a specific default scenario occurring within a year. The negative
