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, Bloomberg News reported. 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. 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. 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.
