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Fitch downgrades GNC's IDR to B- with negative outlook

Fitch Ratings on Dec. 5 downgraded GNC Holdings Inc.'s long-term issuer default rating to B- from B with a negative outlook.

The rating agency said its downgrade of the Pittsburgh-based vitamin and supplement retailer reflects increased refinancing risk after GNC decided to withdraw its plans to issue senior secured notes.

The negative outlook, meanwhile, was based on the agency's reduced confidence in GNC's ability to address upcoming maturities. Those include a $300 million revolver due September 2018, and a $1.1 billion term loan maturity in March 2019.

Fitch also noted that the ratings reflect the leading position that GNC holds in the growing market for health and wellness products, with recent declines in market share taken into consideration.

In regards to recovery considerations, the agency viewed GNC's current operating results as representing a potential post-bankruptcy scenario following an approximately 50% decline in EBITDA over the past three years.

Fitch expects the company's revenue to decline 3% this year and 1% in 2018 due to store closings. EBITDA is expected to drop into the mid-$200 million range in 2017 but rise to between $300 million and $325 million by 2019 or 2020.