Moody’s rates GNC loan, notes Ba3

Moody's Investors Service said it affirmed all ratings of General Nutrition Centers, Inc. (GNC), including the corporate family rating at B1.

The agency also assigned a Ba3 rating to the proposed new senior secured term loan and a Ba3 rating to the new senior secured notes.

The outlook is stable.

The speculative grade liquidity rating was affirmed at an SGL-2.

"GNC continues to work to stabilize sales and its operating income as it executes its business realignment. It is critical that changes to pricing and promotional cadence continue to result in improved sales as it cycles its significant margin investment later this year," Moody's vice president Christina Boni said in a news release.

The proposed refinancing will address its upcoming maturities and give the company financial flexibility albeit at an expected higher interest cost. The agency said it anticipates GNC will have in excess of $150 million in free cash flow available for debt reduction annually.

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