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Fitch Rates Rite Aid's New 8.5% $150MM Convertible Notes 'CCC'.

NEW YORK -- Fitch Ratings has assigned 'CCC/RR6' ratings to Rite Aid Corporation's (Rite Aid, NYSE: RAD) new 8.5% $150 million senior unsecured convertible notes due 2015. The proceeds of the new offering will be used to redeem its $150 million of its 6.125% senior unsecured notes due 2008 at a price equal to approximately 102% of the principal outstanding amount.

Fitch rates Rite Aid as follows:

--Issuer Default Rating (IDR) 'B-';

--$1.75 billion bank credit facility 'BB-/RR1';

--$1.25 billion term loans 'BB-/RR1';

--$1.061 billion 2nd lien senior secured notes 'BB-/RR1';

--$1.851 billion guaranteed senior unsecured notes 'CCC+/RR5';

--$758 million non guaranteed senior unsecured notes 'CCC/RR6'.

The Rating Outlook is Stable.

The ratings consider the risk associated with integrating over 1,800 Brooks and Eckerd stores with Rite Aid's existing store base and improving operations at these stores; the company's high leverage, with total adjusted debt/EBITDAR of 8.1 times (x) for the fiscal year ended March 1, 2008; operating statistics that trail those of competitors; and the intense competition in the drug retailing sector. The ratings also reflect Rite Aid's management's concerted efforts to improve the productivity of its store base, the positive demographics of the drug retailing industry, as well as the benefits from leveraging a larger store base.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
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Publication:Business Wire
Date:May 23, 2008
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