The EDM revolution has not been kind to one of America’s oldest guitar manufacturers. Standard and Poor recently downgraded the 116-year-old company’s credit rating to CCC-minus, from the already very low rating of CCC, indicating that a default is imminent.

Gibson Guitars has $145 million in outstanding bank loans that will come due on July 23 and another $377 million of outstanding secured notes maturing on Aug. 1.

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“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,” said S&P in a report from analyst Francis Cusimano Jr.

The famed guitar company, which sells the beloved Les Paul style guitar, must now find new investors to keep the company afloat, a challenge considering its low bond ratings. If it can’t resolve the crisis, Gibson will likely have to file for Chapter 11 bankruptcy protection this summer.

Dave Brooks
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Dave Brooks

Founder & Executive Editor at Amplify Media
Dave Brooks has over 15 years experience as a writer, including eight years as the Managing Editor of Venues Today. He started Amplify in 2014 to give the industry its own voice and turn up the volume on live entertainment.
Dave Brooks
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