S&P lowers GNC Holdings

S&P said it lowered the corporate credit rating on GNC Holdings Inc. to SD (selective default) from CC.

At the same time, the agency affirmed the CC issue-level rating on the company's secured credit facility and removed it from CreditWatch, where it was placed with negative implications on Dec. 5.

The 3 recovery rating is unchanged, indicating an expectation for meaningful (50% to 70%; rounded estimate: 60%) recovery in the event of a payment default or bankruptcy.

S&P said the downgrade follows the close of GNC's previously announced debt exchange transaction for $98.9 million (out of an original principal value of $287 million) of convertible senior unsecured notes due 2020.

Noteholders received 14.6 million of common shares, about $57 million in value at the $3.8 per share recent trading price for GNC's, and about $0.5 million in cash for accrued interest.

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