Moody’s could lift Rite Aid

Moody's Investors Service said it placed the ratings of Rite Aid Corp. on review for upgrade, including its B2 corporate family rating and B2-PD probability of default rating.

The speculative grade liquidity rating was affirmed at SGL-2.

The review is prompted by Walgreen Boots Alliance, Inc.’s (Baa2 RUR-down) and Rite Aid's announcement that Walgreen Boots would be acquiring Rite Aid for $9 per share plus Rite Aid's existing debt in a transaction valued at about $17.2 billion. The transaction is expected to close during the second half of 2016.

The review for upgrade is based upon Moody's view that, should the acquisition by Walgreen Boots be consummated, Rite Aid will become part of an enterprise with a stronger overall credit profile, and hence a potentially higher rating) than if Rite Aid remains a stand-alone company.

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