Guitar Center postpones $750 million note offering

By Paul A. Harris

St. Louis, Nov. 6 - Guitar Center, Inc. postponed its $750 million two-part offering of high-yield notes, according to market sources.

The company was offering $375 million of eight-year senior cash-pay notes (Caa1/CCC) and $375 million of eight-year senior payment-in-kind notes (Caa2/CCC).

JPMorgan was the bookrunner.

Proceeds were to be used help fund the leveraged buyout of Guitar Center, which is being acquired by Bain Capital Partners LLC.

A market source told Prospect News that there is a possibility that the bond portion of the financing could resurface in the form of a fixed-rate loan.

Conceding that a fixed-rate loan is a novel structure, the source said that there was concern among the accounts that investors could short the deal too easily if it came as a bond.

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

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