S&P cuts Guitar Center

S&P said it downgraded Guitar Center Holdings Inc. and its senior secured notes to CCC. The agency lowered the rating on the senior unsecured notes to CC.

“The downgrade reflects our view that while performance at Guitar Center has improved, the capital structure remains unsustainable relative to cash flow levels and the approaching large debt maturities. As a result, we believe the likelihood of a distressed restructuring occurring in the next 12 months has increased,” said S&P in a press release.

The outlook is negative.

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