NASHVILLE, TN (CelebrityAccess) — The financial situation for guitar manufacturer Gibson continued to deterioriate this week after ratings agency Standard & Poor’s downgraded the company’s credit, making it less likely they will be able to meet their debt obligations.
“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 officials said in a note to clients obtained by the Palm Beach Post. “We are lowering our corporate credit rating to ‘CCC-’ from ‘CCC.’”
The new rating was based in part on S&P’s view that the iconic guitar maker is increasingly likely to experience a default or restructuring event before the end of the year.
Along with the downgrade, the Nashville Post reported that Gibson has also laid off 15 employees from their custom shop, a unit within the company that makes meticulous recreations of vintage guitars and handles custom, one-of-a-kind orders for the company.
Gibson Chief Executive Henry Juszkiewicz told the Post that the layoffs were part of a “broad initiative throughout the company to prepare for our refinancing” and come just weeks after Gibson announced the hiring of Benson Woo, a restructuring specialist, as CFO for the company.