Moody's downgrades Guitar Center

Moody's Investors Service said it downgraded Guitar Center Inc.’s corporate family rating to B3 from B2, its probability of default rating to B3-PD from B2-PD and its senior secured note rating to Caa1 from B3.

“The downgrades reflect Moody's expectation that interest coverage will continue to be weak at approximately 0.9x at the end of fiscal 2023 and recovering to 1.2x in fiscal 2024 as demand for musical instrument merchandise reverts toward pre-pandemic levels. Moody's also expects gross margins to be pressured as the company reduces excess inventory during 2023 and 2024,” the agency said in a statement.

The outlook remains stable.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.