Guitar Center expects to repay $129.8 million of PIK notes in April

New York, Nov. 13 - Guitar Center Holdings, Inc. expects to make a $129.8 million principal payment on its senior PIK notes due 2018 in April 2013, according to a 10-Q filing with the Securities and Exchange Commission.

The payment reflects the amount of previously capitalized PIK interest that must be paid in order to prevent the notes from being treated as "applicable high yield discount obligations" for tax purposes.

Sufficient liquidity is expected to be available to fund the redemption, the company noted.

Guitar Center made half the October 2012 interest payment in kind. It had planned to make the same choice for the April 2012 payment but subsequently made the entire coupon payment in cash. Interest payments due in April and October 2011 were made in cash.

All future interest payments must be made in cash.

Guitar Center is a Westlake Village, Calif.-based retailer of musical instruments.

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