Fitch rates Rite Aid notes, loan BB-

Fitch Ratings said assigned ratings of BB-/RR1 to Rite Aid Corp.'s $350 million secured term loan due 2014 and $425 million second-lien senior secured notes due 2016.

The agency downgraded the guaranteed senior unsecured notes to CCC/RR6 from CCC+/RR5 and non-guaranteed senior unsecured notes to CCC-/RR5 from CCC'/RR6.

Affirmed were the issuer default rating at B-, $1.75 billion bank credit facility at BB-/RR1, term loans at BB-/RR1 and second-lien senior secured notes at BB-/RR1.

The outlook is stable.

Proceeds will be used to fund tender offers on the $360 million 8 1/8% senior secured notes due 2010, $200 million 7½% senior secured notes due 2015 and $150 million 9¼% senior unsecured notes due 2013.

Ratings reflect the company's strong market share, management's efforts to improve the productivity of its store base, the company's adequate liquidity and management of debt, the agency said, as well as the benefits from leveraging a larger store base.

Ratings also consider the risk associated with the acquired Brooks and Eckerd stores, the company's high leverage and limited capital for investment, as well as operating statistics that trail those of its competitors, Fitch said.

The issuer has a total adjusted debt-to-EBITDAR ratio of 8 times.

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