Fitch rates InRetail Pharma, notes BB+

Fitch Ratings said it assigned BB+ long-term foreign and local currency issuer default ratings to InRetail Pharma SA.

The outlook is stable.

The agency also assigned an expected rating of BB+(EXP) to InRetail Pharma's proposed senior unsecured notes.

The target amount for the proposed transactions is up to $550 million, which includes a dollar-denominated senior unsecured issuance of up to $450 million and a Nuevo-Soles (local currency) denominated senior unsecured issuance of up to an equivalent of approximately $100 million. The total amount and tenor of the proposed issuances will depend on market conditions.

Proceeds are expected to be used to refinance existing debt.

Fitch said the ratings reflect InRetail Pharma's strong credit linkage with its parent company (InRetail Peru Corp.), solid market position in the Peruvian retail pharmacy industry, the combination of initial high pro forma net adjusted leverage following a recent acquisition of Quicorp SA, and some moderate deleveraging over the near- to medium-term, anticipated synergies, and stable cash flow generation from the acquisition and adequate liquidity.

The stable outlook reflects the agency’s view that InRetail Pharma will integrate Quicorp's operations with net adjusted financial leverage trending in the 4 times to 4.5 times range and generating positive FCF by 2019-2020.

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