S&P upgrades GNC

Standard & Poor's said it raised the corporate credit rating on General Nutrition Centers Inc. to B+ from B because of improved credit metrics and favorable operating performance.

S&P also said it raised the senior secured debt ratings to B+ from B with a 3 recovery rating, indicating a 50% to 70% expected recovery in a default. Also upgraded were the senior unsecured debt and subordinated debt ratings to B- from CCC+ with a 6 recovery rating, which indicates an expected recovery of 0% to 10% in a default.

The outlook is stable.

The ratings reflect GNC's continued good operating performance and related improvement in credit protection measures, including a total debt-to-EBITDA ratio of 5.1x as of June 30, the agency said, despite a weak economy and a fragile retail environment.

The agency said if the total debt-to-EBITDA ratio declined to the 5x range, it would consider an upgrade of the company.

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