Gibson Guitars and its related music companies got more bad news last week as top credit agency Standard & Poor's downgraded the companies already poor credit rating, making it even harder for the troubled company to find the money to continue.
Standard & Poor's credit rating service is predicting that Gibson is headed towards bankruptcy.
“With multiple maturities looming and operating weakness ongoing, we believe Nashville-based Gibson Brands could default on its debt obligations over the next six months,” Standard & Poor’s said in a memo to clients. “We are lowering our corporate credit rating to ‘CCC-’ from ‘CCC’.”
Gibson has $145 million in outstanding bank loans that come due on July 23 and another $377 million in secured notes maturing on August 1.