S&P affirms Fender; outlook negative

Standard & Poor's said it affirmed the B+ corporate credit rating on Fender Musical Instruments Corp. and revised the outlook to negative from stable.

The outlook revision reflects its concern about decreasing sales volumes during fiscal 2009 amid the current economy and its expectation that leverage may increase above its previously expected levels, the agency said.

S&P said it also affirmed the B+ senior secured debt rating on the company's $300 million term loan and maintained the recovery rating of 3, indicating the expectation for meaningful recovery in a payment default.

The rating on Fender reflects the company's high debt leverage and narrow business focus, and the discretionary nature of its products, the agency noted.

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