Moody’s lowers GNC, facility to B1

Moody's Investors Service said it downgraded the corporate family rating of General Nutrition Centers, Inc. (GNC) from B1 to B2.

The ratings on formerly proposed senior secured notes are withdrawn.

The senior secured bank credit facility was downgraded to B1 from Ba3 and the outlook was changed from stable to negative.

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

"Although GNC's proposed refinancing will address its maturing revolver in September 2018, the proposed term loan will increase debt maturing in 2020 as it continues to work to stabilize its operating income as it executes its business realignment. The proposed structure is also expected to increase its interest cost significantly," Moody's vice president Christina Boni said in a news release.

The agency added that it anticipates that GNC will generate an estimated $120 million in free cash flow, which will be primarily deployed toward debt reduction annually.

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