Moody's: Rite-Aid to positive

Moody's Investors Service said it changed Rite Aid Corp.'s outlook to positive from stable.

The agency also affirmed its corporate family rating at Caa1, probability of default rating at Caa1, first-lien bank credit facilities at B2 (LGD 2, 27%), first-lien senior secured notes at B2 (LGD 2, 27%), second-lien senior secured notes at Caa1 (LGD 4, 58%), guaranteed senior unsecured notes at Caa2 (LGD 5, 82%), senior unsecured notes and debentures at Caa3 (LGD 6, 95%) and speculative grade liquidity rating at SGL-3.

The outlook change acknowledges the continued improvement in Rite Aid's operating income - a trend that is sustainable, Moody's said.

Rite Aid's operating income has improved as a result of its improved store environment from remodels, continued growth in its loyalty card program and gain of customers due to Walgreen's dispute with Express Scripts, the agency said.

Credit metrics also improved with debt-to-EBITDA falling to 8.3x for the 12 months that ended Dec. 1,

2012 from 8.9x at the last fiscal yearend, Moody's said.

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