S&P rates Guitar Center loans B+, B-, notes CCC

Standard & Poor's said it assigned a B- corporate credit rating to Guitar Center Holdings Inc., parent of Guitar Center Inc.

S&P also assigned Guitar Center's proposed $375 million asset-based revolver due 2013 a rating of B+ and $650 million term loan facility a rating of B-. The agency also assigned CCC ratings to Guitar Center's proposed $375 million senior unsecured notes due 2015 and Guitar Center Holdings' $375 million senior unsecured payment-in-kind notes due 2016.

The outlook is negative.

Proceeds will help fund the purchase of Guitar Center Inc. by Bain Capital Partners LLC for a total purchase price of $2.2 billion.

The ratings reflect the highly fragmented and competitive music products retail market, weaker-than-expected operating results at the music and arts division, and a highly leveraged capital structure, the agency said.

The company's pro forma total debt-to-EBITDA ratio will be 9.1 times, S&P said.

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