Guitar Center to launch $1.025 billion credit facility on Friday

By Sara Rosenberg

New York, Oct. 3 - Guitar Center Inc. has scheduled a bank meeting for Friday to launch its proposed $1.025 billion senior secured credit facility, according to a market source.

JPMorgan is the lead bank on the deal.

The facility consists of a $375 million ABL revolver and a $650 million seven-year term loan B, the source said.

Previously, based on filings with the Securities and Exchange Commission, it was thought that the term loan B would carry a size of $800 million, which would have brought the total credit facility size to $1.175 billion.

Proceeds will be used to help fund the leveraged buyout of the company by Bain Capital Partners LLC for $63.00 in cash per share. The total transaction value, including assumed debt, is $2.1 billion.

Other LBO financing will come from bonds, which are backed by bridge loans, and from equity.

Guitar Center is a Westlake Village, Calif., retailer of guitars, amplifiers, percussion instruments, keyboards and pro-audio and recording equipment.

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