Guitar Center Announces Pricing of $635 Million Senior Secured Notes Offering by Guitar Center Escrow Issuer

WESTLAKE VILLAGE, Calif., March 14, 2018 -- Guitar Center, Inc. (the “Company”) today announced that its indirect wholly owned subsidiary Guitar Center Escrow Issuer, Inc. (the “Issuer”) has priced $635 million in aggregate amount of 9.500% senior secured notes due 2021 at an issue price of 98.140% (the “Notes”). The Notes are being offered to “qualified institutional buyers” (as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”)) in a private placement (the “Notes Offering”), in reliance upon the exemption from the registration requirements of the Securities Act and certain non-U.S. persons outside the United States in accordance with Rule 902 under the Securities Act. The Notes Offering is expected to close on March 16, 2018, subject to customary closing conditions. Following satisfaction of conditions including the completion of the Company’s exchange offer and consent solicitation relating to the Company’s 9.625% Senior Notes due 2020 (the “Exchange Offer”), the Issuer will be merged with and into the Company, with the Company surviving.

The Company intends to use the net proceeds from this offering, together with borrowings under the Company’s $375.0 million senior secured asset-based revolving credit facility (the “ABL Facility”), to (i) redeem all of the Company’s outstanding 6.500% Senior Secured Notes due 2019 (including accrued and unpaid interest, if any, to the redemption date) and (ii) pay fees and expenses related to the Notes Offering, the Exchange Offer and an amendment and extension to the ABL Facility.

The Notes will not be registered under the Securities Act of 1933 or the securities laws of any state and may not be offered or sold in the United States absent registration or an exemption from the registration requirements of the Securities Act and applicable state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy any security, nor shall there be any sale of the Notes or any other security of the Company, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.

About Guitar Center

Guitar Center is a leading retailer of musical instruments, lessons, repairs and rental instruments in the U.S. With more than 280 stores across the U.S. and one of the top direct sales websites in the industry, Guitar Center has helped people make music for more than 50 years. Guitar Center also provides customers with various musician based services, including Guitar Center Lessons, where musicians of all ages and skill levels can learn to play a variety of instruments in many music genres; GC Repairs, an on-site maintenance and repairs service; and GC Rentals, a program offering easy rentals of instruments and other sound reinforcement gear. Additionally, Guitar Center’s sister brands include Music & Arts, which operates more than 150 stores specializing in band & orchestral instruments for sale and rental, serving teachers, band directors, college professors and students, and Musician’s Friend, a leading direct marketer of musical instruments in the United States.

Investor Contact:

FOR MORE INFORMATION PLEASE CONTACT:
Laura Bainbridge / Madeleine Myers
Addo Investor Relations
O: 310.829.5400
[email protected] / [email protected]

The Company has included statements in this press release that constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act, as amended, and Section 27A of the Securities Act of 1933, as amended. As a general matter, forward-looking statements are those focused on future or anticipated events or trends, expectations and beliefs including, among other things, the Company’s expectations with respect to the amend and extend transaction described herein. Such statements are intended to be identified by using words such as “believe,” “expect,” “intend,” “estimate,” “anticipate,” “will,” “project,” “plan” and similar expressions in connection with any discussion of future operating or financial performance. Any forward-looking statements are and will be based upon the Company’s then-current expectations, estimates and assumptions regarding future events and are applicable only as of the dates of such statements. Readers are cautioned not to put undue reliance on such forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those projected in this press release for reasons, among others,(i) the ability of the Company to satisfy the conditions to the Exchange Offer, (ii) the availability of alternative transactions, (iii) economic trends, the competitive environment, weather, trends in operating performance, merchandise mix, SG&A costs, liquidity and capital expenditures and (iv) those reasons described in the Offering Memorandum and in the reports and other documents the Company provides to its noteholders from time to time and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections contained in the Company’s annual report for the fiscal year ended December 31, 2016 and quarterly report for the 2017 third fiscal quarter. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.