S&P lifts Rite Aid loan, notes due to new criteria

S&P said it reviewed the recovery and issue-level ratings on Rite Aid Corp. that were considered under criteria observation (UCO) after publishing its revised recovery ratings criteria Dec. 7.

With the criteria review complete, S&P said it removed the UCO designation from these ratings and revised the ratings on the company's term loan and guaranteed unsecured debt.

All of its other ratings are unchanged.

The recovery rating on the term loan is revised to 1 from 2L and the issue-level rating is raised to BB- from B+. The 1 recovery rating indicates 90% to 100% expected default recovery.

S&P also said it revised the recovery ratings on the company's guaranteed unsecured notes to 5H from 6 and raised the rating to B- from CCC+.

The 5 recovery rating indicates 10% to 30% expected default recovery.

The revised recovery rating stems solely from the application of the revised recovery criteria and do not reflect any change in the assessment of the corporate credit ratings for issuers of the affected debt issues, the agency said.

All of the ratings on the company, including its B corporate credit rating, remain on CreditWatch with positive implications, where they were placed following news that the company entered into a definitive agreement to be acquired by Walgreens Boots Alliance Inc.

The transaction is pending regulatory review, S&P said.

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