Moody's rates Rite Aid loan B3

Moody's Investors Service said it assigned a B3 to Rite Aid Corp.'s proposed $500 million tranche 2 senior secured second-lien term loan due 2021.

At the same time, Moody's said it affirmed Rite Aid's B3 corporate family rating, B3-PD probability of default rating and SGL-2 speculative-grade liquidity rating.

The proceeds from the proposed facility, along with borrowings under its revolving credit facility, will be used to repay in full Rite Aid's $500 million 7½% second-lien notes due 2017.

Moody's said it views this refinancing as a credit positive event as it will reduce Rite Aid's annualized interest expense going forward which will improve interest coverage. The refinancing will also benefit Rite Aid's debt maturity profile.

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