Moody's drops Gibson Guitar

Moody's Investors Service said it downgraded Gibson Guitar Corp.'s corporate family rating to B3 from B2 largely due to Moody's expectation of weaker than expected 2009 operating performance versus 2008.

At the same time, the probability of default rating was downgraded to Caa1 from B3 and the rating on the senior secured credit facility was downgraded to B3 from B2, the agency added.

The ratings are on review for possible further downgrade.

Although subject to change, the LGD assessments are not on review, Moody's said, adding that the one-notch downgrade in the corporate family rating to B3 from B2 reflects the company's expected diminishing operating performance in 2009 versus 2008 and Moody's view that operating performance will likely continue to be pressured for the near term.

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