S&P lowers Rite Aid

S&P said it downgraded the issuer credit rating on Rite Aid Corp. to B- from B.

S&P lowered the issue-level rating on the first-lien term loan facility to B from BB- and revised the recovery rating to 2 from 1. At the same time, S&P lowered the issue-level rating on the company's asset-based lending facility to B+ from BB- and the issue-level rating on its unsecured debt to CCC from CCC+. The recovery ratings on these instruments remain unchanged.

The outlook is negative.

“The downgrade reflects our belief that the industry headwinds in the highly competitive drugstore sector, which is evolving rapidly due to acquisitions, partnerships and collaborations, and complex shifts in the U.S. health care system, will persist,” S&P said in a news release.

“We now expect Rite Aid's adjusted EBITDA margins to be in the mid-5% area this year (fiscal year ending March 2020), which is well below our previous forecast of the low 6% area.”

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.