S&P ups Guitar Center

Standard & Poor's said it raised its corporate credit rating on Guitar Center Holdings Inc. to B- from SD. The outlook is negative.

At the same time S&P withdrew its issue-level ratings on the company's $323 million asset-based lending revolver and $650 million term loan following the completed refinancing of these debt instruments. In addition, S&P withdrew its issue-level ratings on both the $401.8 million holding company and $375 million operating company notes following the completion of the exchange.

"The rating action follows the completed restructuring, whereas the company exchanged more than $500 million of its balance sheet debt into preferred equity," said S&P credit analyst Mariola Borysiak in a news release.

"The transaction improves the company's cash flow generation and liquidity profile, which we now view as 'adequate.'"

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