S&P gives Rite Aid loan BB-

Standard & Poor's said it assigned its BB- rating and 1 recovery rating to Rite Aid Corp.'s $1.105 billion senior secured tranche 2 term loan facility.

The 1 recovery rating indicating the high expectation for full recovery of principal in the event of a payment default, the agency noted.

Concurrently, S&P said it raised the ratings on the three existing second-lien notes to B+ from B and assigned a 1 recovery rating, indicating the high expectation for full recovery of principal in the event of a default, while the secured notes ratings have been removed from CreditWatch with developing implications.

At the same time, S&P said it affirmed all other ratings, including the B corporate credit rating.

The outlook is stable.

"The stable outlook anticipates that the integration of the acquired stores is successful," said S&P credit analyst Diane Shand, "and that free operating cash flow turns positive in fiscal 2008, while leverage declines moderately over the next few years through a combination of increased EBITDA and debt repayment."

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