S&P ups Guitar Center, rates notes CCC+, CCC-

S&P said it raised its corporate credit rating on Guitar Center Inc. to CCC+ from SD and on Guitar Center Holdings Inc. to CCC+ from CC. The outlook is negative.

At the same time, the agency assigned a CCC+ issue-level rating and 3 recovery rating to the company's $635 million 9½% senior secured notes due Oct. 21, 2021. The 3 recovery rating indicates an expectation for meaningful recovery (50%-70%; rounded estimate 60%) in the event of a payment default.

S&P assigned a CCC- issue-level rating to the company's $318 million 5% cash/8% PIK senior unsecured notes due April 15, 2022. The 6 recovery rating indicates negligible (0%-10%; rounded estimate: 0%) recovery.

The agency raised the issue-level rating on the remaining portion (roughly $7 million) of the existing unsecured notes due April 15, 2020 to CCC- from D. The 6 recovery rating is unchanged.

S&P raised the issue-level rating on the company's $375 million asset-based lending revolver to B from CCC+ and removed it from CreditWatch positive where it was placed on March 12 and subsequently withdrew the ratings on this debt at the issuer's request.

The agency said the upgrade follows the completed refinancing of the senior secured notes and restructuring of the unsecured notes, by which Guitar Center was able to extend debt maturities by two years.

© 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.