Moody’s assigns Rite Aid notes Caa1

Moody’s Investors Service said it assigned a Caa1 rating to Rite Aid Corp.’s new senior secured notes. The new notes mature in 2026 and will be issued in exchange for up to $750 million of the unsecured notes maturing in 2023.

“Rite Aid continues to address its 2023 maturities which is a credit positive but operational challenges remain,” said Mickey Chadha, a Moody’s vice president, in a press release.

“We expect only modest improvement in credit metrics and free cash flow in the next 12 months as the retail pharmacy space remains under pressure and new management initiatives will take longer to show results in the midst of the uncertain business environment,” Chadha stated.

The outlook is negative.

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