Post by smosey wales on Jun 15, 2021 13:08:26 GMT -5
finance.yahoo.com/news/gibson-rescuer-kkr-seeks-payout-191610802.html?guccounter=1&guce_referrer=aHR0cHM6Ly9ia2luZm9ybWF0aW9uLmNvbS8&guce_referrer_sig=AQAAANh5l4cW3KyL2uxkjvRgkzk7Hw4eccE6GrSqnvUQbrw1bh_k3OfjRA3dIg9ZlBgtrbLFUdy_gVCVK2wceqa8KZvtxgb0hkPjS_Zuj3KHkSnL1bcyHkwwOtfe0VeIqo7CK-3Q70qWCBruaHrylbMKuRYRRp-aEGUOUD6blc0Pcp16
Alex Wittenberg and Davide Scigliuzzo
Mon, June 14, 2021,
(Bloomberg) -- A pandemic-fueled revival in sales of Gibson guitars may help produce a windfall for KKR & Co., controlling owner of the iconic brand favored by music legends from Eric Clapton to Joan Jett.
Gibson Brands Inc. is marketing a $250 million first-lien term loan that will be used to fund dividend payments and add cash to its balance sheet, according to people familiar with the matter. KKR took control of the guitar maker during its 2018 bankruptcy process as one of Gibson’s biggest lenders, holding $198 million of the company’s notes at the time.
About $225 million of the loan sale will fund the dividend, according to Moody’s Investors Service, which assigned a B2 rating to the company, five levels below investment-grade. A representative for KKR declined to comment, while Gibson did not immediately respond to a request for comment.
KKR led a rescue of Gibson almost three years ago, when guitar enthusiasts at the private equity company helped the manufacturer exit bankruptcy. Sales at the 127-year-old instrument maker took off last year, as Covid-19 lockdowns spurred people to seek new hobbies like guitar playing. Gibson’s order book and sales backlog are now the largest in the company’s history, said a separate person with knowledge of the matter who asked not to be identified because the information is private.
“In a world of digital acceleration, time is always your enemy. All of a sudden time became your friend,” Gibson Chief Executive Officer James Curleigh told the New York Times in September.
The debt offering is Gibson’s first since emerging from bankruptcy. The 2018 filing came four years after Gibson paid $135 million to buy its audio and home entertainment business from Koninklijke Philips NV in a bid to relaunch Gibson Guitars as Gibson Brands Inc., a “music lifestyle” company. The unit soon became a financial burden and at the time of the bankruptcy, Gibson owed as much as $500 million.
Blackstone Group LP’s GSO credit unit came forward that year to challenge KKR’s claim to Gibson, but the firms later settled on the reorganization plan by increasing recoveries for unsecured creditors.
A lender call for the debt sale is scheduled for Tuesday afternoon, said one of the people.
Alex Wittenberg and Davide Scigliuzzo
Mon, June 14, 2021,
(Bloomberg) -- A pandemic-fueled revival in sales of Gibson guitars may help produce a windfall for KKR & Co., controlling owner of the iconic brand favored by music legends from Eric Clapton to Joan Jett.
Gibson Brands Inc. is marketing a $250 million first-lien term loan that will be used to fund dividend payments and add cash to its balance sheet, according to people familiar with the matter. KKR took control of the guitar maker during its 2018 bankruptcy process as one of Gibson’s biggest lenders, holding $198 million of the company’s notes at the time.
About $225 million of the loan sale will fund the dividend, according to Moody’s Investors Service, which assigned a B2 rating to the company, five levels below investment-grade. A representative for KKR declined to comment, while Gibson did not immediately respond to a request for comment.
KKR led a rescue of Gibson almost three years ago, when guitar enthusiasts at the private equity company helped the manufacturer exit bankruptcy. Sales at the 127-year-old instrument maker took off last year, as Covid-19 lockdowns spurred people to seek new hobbies like guitar playing. Gibson’s order book and sales backlog are now the largest in the company’s history, said a separate person with knowledge of the matter who asked not to be identified because the information is private.
“In a world of digital acceleration, time is always your enemy. All of a sudden time became your friend,” Gibson Chief Executive Officer James Curleigh told the New York Times in September.
The debt offering is Gibson’s first since emerging from bankruptcy. The 2018 filing came four years after Gibson paid $135 million to buy its audio and home entertainment business from Koninklijke Philips NV in a bid to relaunch Gibson Guitars as Gibson Brands Inc., a “music lifestyle” company. The unit soon became a financial burden and at the time of the bankruptcy, Gibson owed as much as $500 million.
Blackstone Group LP’s GSO credit unit came forward that year to challenge KKR’s claim to Gibson, but the firms later settled on the reorganization plan by increasing recoveries for unsecured creditors.
A lender call for the debt sale is scheduled for Tuesday afternoon, said one of the people.