Fitch Ratings has assigned a rating of ‘BB-/RR1’ to Rite Aid’s proposed new $1.725 billion secured revolving credit facility due 2018, $900 million senior secured term loan B due 2020, and $470 senior secured second lien term loan due 2020. The Rating Outlook is Stable.

The proceeds will be used to refinance Rite Aid’s existing $1.175 billion ABL facility due 2015, $1.039 billion first lien secured term loan due 2014, $410 million first lien secured notes due 2016, and $450 million second lien secured notes due 2016, leaving it with the same mix of first and second lien secured debt post refinancing. Further, the company plans to redeem $186 million of senior unsecured notes due 2013 with cash on hand.

The ratings continue to reflect the following:

  • Rite Aid’s high leverage and operating statistics that significantly trail its two major competitors;

  • Strong market share position as the third largest U.S. drug retailer;

  • Management’s concerted efforts to improve the productivity of its store base and manage liquidity through a series of refinancings that have pushed out debt maturities to 2017, working capital reductions and other cost cutting initiatives.

    To read the entire Fitch Ratings report, click here.