S&P ups GNC loan to B+

Standard & Poor's said it raised its bank loan rating on General Nutrition Centers Inc. to B+ from B. All other ratings on GNC were affirmed, including the B corporate credit rating. The outlook is stable.

S&P also affirmed GNC's B+ secured bank loan rating, B- senior unsecured debt rating, CCC+ subordinated debt rating and CCC preferred stock rating.

The company recently used the proceeds from a senior unsecured note offering to repay a significant portion of its term loan, thereby reducing the overall level of its senior secured debt. As a result, the value of the company, in a distressed scenario, will more than fully cover the smaller bank loan.

S&P said the ratings reflect the company's recent weak operating performance, expectations of continued operational challenges, its product liability risk and high debt leverage.

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