Standard & Poor raises outlook on Rite Aid

7/15/2009

NEW YORK Standard & Poor’s Ratings Services on Tuesday revised its outlook on Rite Aid to stable from negative, the company announced.

“The rating action follows Rite Aid’s successful refinancing of the bulk of its 2010 debt maturities, including a new $1 billion asset-based revolving credit facility, thereby improving its liquidity position and enhancing financial flexibility,” stated Standard & Poor’s credit analyst Ana Lai. “Further, Rite Aid’s operating performance remains adequate and we expect cash flow generation to improve due to operating initiatives to reduce inventory and capital spending cuts, resulting in good levels of positive free cash flow.”

Standard & Poor’s Ratings Services suggested it would consider revising the outlook to positive if the company is successful at turning around the Eckerd stores’ performance, thereby increasing profitability and cash flow, with credit metrics strengthening such that leverage falls to less than 7.0x.

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