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Guitar Center Announces Senior Secured Notes Offering

March 12, 2018, 08:00 AM
Filed Under: Industry News

Guitar Center, Inc. announced that its indirect wholly owned subsidiary Guitar Center Escrow Issuer, Inc. intends to offer, subject to market conditions and other considerations, $635 million in aggregate principal amount of senior secured notes due 2021 to “qualified institutional buyers” in a private transaction in reliance upon the exemption from the registration requirements of the Securities Act and certain non-U.S. persons outside the United States in accordance with Rule 902 under the Securities Act. The Notes will be guaranteed on a senior secured basis by the Company’s existing and future domestic restricted subsidiaries.  Following satisfaction of conditions including the completion of the Company’s exchange offer and consent solicitation  relating to the Company’s 9.625% Senior Notes due 2020, the Issuer will be merged with and into the Company, with the Company surviving.

The Company intends to use the net proceeds from this offering, together with borrowings under the Company’s $375.0 million senior secured asset-based revolving credit facility (the “ABL Facility”), to (i) redeem all of the Company’s outstanding 6.500% Senior Secured Notes due 2019 (including accrued and unpaid interest, if any, to the redemption date) and (ii) pay fees and expenses related to the Notes Offering, the Exchange Offer and an amendment and extension to the ABL Facility.

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