Moody's lowers Gibson Guitar rating

NEW YORK

Moody's Investors Service lowered ratings for Gibson Guitar Corp. Tuesday, citing worries about the guitar maker's financial liquidity and an ongoing delay in revealing its 2008 audited financial statements.

Moody's downgraded Gibson's corporate family rating to "Caa1" from "B3" and its probability of default rating to "Caa2" from "Caa1." The ratings service also lowered its rating for the Nashville, Tenn., company's $50 million senior secured credit facility and $100 million senior secured loan to "Caa1" from "B3." The ratings are considered non-investment grade.

Moody's said the downgrade relates to its worries about the guitar maker's liquidity since it can no longer use its revolving credit line and banks, while unlikely to do so, could suddenly demand that its loan be repaid.

Moody's, whose downgrades come as a result of a review it began in late October, said its rating outlook is now set as "developing." Moody's said that its outlook would probably be stabilized if Gibson releases financial statements in the next month or two that are not that different from its unaudited results.