Guitar Center Makes Payments, Avoiding Default

Guitar Center, the largest U.S. retailer of musical instruments and equipment, has made bond payments it skipped last month, thus avoiding the threat of a default.

Last month, Guitar Center failed to pay interest on its unsecured bonds due 2022 and first-lien bonds due 2021, putting them in danger of a default. Since the chain made the required payments by May 15, the company is no longer at risk.

"We are pleased with the outcome of these transactions and the support and cooperation that we received from our lenders who recognize the value of our businesses," Tim Martin, Guitar Center's chief financial officer, said. "These transactions bolster our immediate liquidity position and allow us to focus on operating our business through these difficult times. We believe that with these transactions and the staged reopening of the country along with our pre-pandemic positive business performance, we are well positioned to meet these challenging market conditions."