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Moody's drops Guitar Center
Moody's Investors Service said it downgraded Guitar Center Holdings, Inc.'s long-term ratings, including its corporate family rating and probability of default rating to Caa1 from B3.
The speculative-grade liquidity rating of SGL-3 is affirmed, the agency said.
The outlook is stable.
Moody's said that the downgrade reflects Guitar Center's soft growth which has resulted in weaker than expected credit metrics.
Other affect ratings include the company's senior secured bank credit facility to B3 (LGD3, 38%) from B2 (LGD4, 41%).
Moody's noted that the Caa1 corporate family rating reflects Guitar Center's heavy debt load and slower than expected sales growth, which has resulted in very weak credit metrics.
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