S&P downgrades Jean Coutu

Standard & Poor's said it lowered its long-term corporate credit rating on Jean Coutu Inc. to B+ from BB-, its senior unsecured debt and subordinated note ratings to B-, and its senior secured debt ratings to BB- from BB.

The outlook has been revised to stable.

S&P said the ratings reflect the company's continued high lease-adjusted leverage resulting from the acquisition of more than 1,500 Eckerd stores from JC Penney Co. Inc. in July 2004; integration delays associated with these Eckerd stores; the more difficult-than-expected challenges to enhance revenues and hence their profitability, particularly in the front-end; and credit metrics that remain weak for the ratings.

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