Deals
Guitar Center Bonds Hit a Sour Note
- Moody’s may downgrade if music chain doesn’t extend maturities
- Leveraged buyout and online rivals put pressure on cash
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Guitar Center Inc. investors are fretting about its billion-dollar debt load.
Bonds issued by the biggest U.S. music retailer are hovering near record lows after Moody’s Investors Service said the chain needs to refinance this year and do a better job of curtailing leverage. If it doesn’t, Guitar Center’s credit rating could fall deeper into junk, a move likely to drive up borrowing costs.