Fitch rates Walgreens Boots notes BBB

Fitch Ratings said it assigned a BBB rating to Walgreens Boots Alliance, Inc.’s $6 billion senior unsecured notes.

The notes, which range in maturity from 2018 to 2046, will be used to partly fund the company’s acquisition of Rite Aid Corp., assuming regulatory approval.

The company has a long-term issuer default rating of BBB and stable outlook.

Of the total $17 billion purchase price for Rite Aid, Walgreens Boots is funding the acquisition with $14.6 billion of debt, including the assumption of $2.3 billion of Rite Aid’s existing unsecured debt, the agency said.

The ratings reflect the company’s leading position and increasing market share in the growing drugstore category, Fitch said.

Its ample free cash flow provides it the financial flexibility to strategically invest in its business and new opportunities while managing its balance sheet, the agency said.

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