Moody’s downgrades GNC, loan

Moody's Investors Service said it downgraded General Nutrition Centers, Inc.’s (GNC) corporate family rating to Caa1 from B2 and senior secured term loan due 2019 to B3 from B1.

The outlook remains negative.

The speculative grade liquidity rating was downgraded to SGL-4 from an SGL-2.

"The withdrawal of GNC's proposed refinancing leaves GNC with significant upcoming maturities as it continues to work to stabilize its operating income as it executes its business realignment. Strategic initiatives to reduce debt through alternative means appears necessary to address its capital structure," Moody's vice president Christina Boni said in a news release.

The agency added that it anticipates that GNC can continue to generate an estimated $140 million in free cash flow which will enable GNC to repay its revolver fully as its pursues alternatives to meet its $1.1 billion outstanding term loan maturity in March 2019.

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