This report does not constitute a rating action. Effective sales and marketing will lead to market share gains. We project about 6% annual revenue growth over the next two years supported by Sweetwater Borrower LLC’s sales force and customer service and further expansion of its rental business and products. Sweetwater’s proprietary data platform enables sales engineers to deepen customer relationships, bring in repeat purchases, and capitalize on e-commerce trends in a flat-growth industry. We view Sweetwater’s products as largely discretionary. Operating performance would likely deteriorate in a recession as demand for audio equipment, instruments, and live music events declines. We also expect increased competition from Guitar Center, which is executing turnaround initiatives and improving performance. Improved sales leverage and market
