Fitch upgrades Rite Aid

Fitch Ratings said it upgraded Rite Aid Corp.'s long-term issuer default rating to CCC from C following the completion of its amended tender offer.

Rite Aid's prior C rating reflected the view that the original terms of the tender offer represented a distressed debt exchange although the amended terms remove the coercive nature of the original offer and thus Fitch said it no longer deems the transaction a DDE.

“Rite Aid's CCC rating is lower than its pre-tender B- rating, as its capital structure looks increasingly unsustainable given ongoing operational challenges as the company approaches its 2025 maturities. Heightening refinancing risk is somewhat mitigated by Rite Aid's ample liquidity of well over $1 billion under its revolver, supported by a rich asset base of pharmaceutical inventory and prescription files,” the agency said in a press release.

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