Fitch Rates CVS's $1.5B Unsecured Notes 'BBB'; Outlook Stable

Business Wire, August 10, 2006

NEW YORK -- Fitch rates CVS's new $1.5 billion of 5 and 10-year senior unsecured notes 'BBB'. The Rating Outlook is Stable.

The proceeds will be used to repay a portion of its outstanding commercial paper. This transaction reduces the amount of short term borrowings the company maintains following its $3.93 billion acquisition of approximately 700 stand alone drug stores from Albertson's. Debt balances and corresponding adjusted leverage will remain unchanged.

The ratings reflect the increased financial leverage the company maintains following its recent acquisition, challenges associated with integrating the acquired stores and operating in new markets, and the competitive drug retailing operating environment. Also considered is the company's strong brand name recognition and leading market positions which have led to strong operating performance and positive industry fundamentals.

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