Fitch Ratings has affirmed the ratings for Walgreens Boots Alliance (WBA), including its Long-Term Issuer Default Rating (IDR) at 'BBB-' and its Short-Term IDR and CP program at 'F3', following the proposed sale of its European pharmaceutical distribution business to AmerisourceBergen Corp (ABC, A-/Stable) for approximately $6.5 billion, or 12x EBITDA of around $540 million.
Fitch has also affirmed the company's unsecured revolving credit facilities and notes at 'BBB-', including those issued under subsidiaries. The Rating Outlook remains Negative.
Fitch views the sale as credit-neutral, assuming WBA uses around $2 billion of proceeds to repay debt, mitigating the impact of lost EBITDA on its current leverage profile. The Negative Outlook continues to reflect ongoing operational challenges, which have caused EBITDA to decline materially to $6.4 billion in fiscal 2020 (ended August 2020) from an $8.9 billion peak in fiscal 2018, with limited confidence in a near-term rebound in performance.
Adjusted debt/EBITDAR (capitalizing leases at 8x) has climbed from the low-3x maintained through fiscal 2018 to 4.6x in fiscal 2020, with operational declines exacerbated by increased debt levels to fund share buybacks during fiscal 2019. Adjusted leverage could remain above 4.0x in fiscal 2021 and fiscal 2022, based on Fitch's current EBITDA forecast of $6.2 billion in fiscal 2022, pro forma for the sale of the distribution business, unless WBA uses FCF and close to $4 billion in asset sale proceeds toward debt reduction.
To stabilize its Outlook, Walgreens would need to demonstrate stabilizing results in fiscal 2021 and better than expected top-line and EBITDA growth beginning fiscal 2022 which, alongside debt reduction, would yield adjusted leverage sustaining below 4.0x. Leverage of 4x could be achieved with debt paydown of close to $8 billion (FCF and $4 billion from asset sale proceeds) in fiscal 2021 and fiscal 2022 based on Fitch's current expectation of around $6.2 billion in EBITDA on a pro forma basis in fiscal 2022. Leverage of 4x could also be achieved by EBITDA in the high $6.6 billion and total debt paydown of $6 billion (with $2 billion from asset sale proceeds). Demonstration of revenue and EBITDA growth would improve Fitch's confidence in WBA's ability to expand market share and EBITDA longer term, commensurate with its current credit profile.
WBA's 'BBB-' rating continues to reflect the company's leading position in the U.S. drugstore industry. The rating considers expectations for modest growth in pharmaceutical spending over time but recognizes ongoing gross margin pressure due to industry and competitive dynamics.
The drugstore industry has historically been relatively resilient to discount and online competition, given the copay structures of prescription drug plans and convenience nature of front-end purchases, though Fitch sees evidence that some front-end competitive insulation could be eroding. The rating also considers the negative near-term impact of the coronavirus pandemic on WBA's operating results, including weak top-line momentum in its U.K. retail business, higher operating costs and pharmaceutical gross margin challenges.
KEY RATING DRIVERS
European Pharmaceutical Distribution Sale: The company has proposed a sale of its European pharmaceutical distribution business, which generates around $20 billion in revenue and $540 million in EBITDA, to ABC for approximately $6.5 billion, or 12x EBITDA. WBA will receive $6.3 billion in cash proceeds plus $200 million in ABC equity, increasing its ABC ownership stake to approximately 28.5% from 27.8% currently. While the business provided WBA some diversification benefits from its predominantly retail drugstore focus, the segment was relatively small at around 8% of fiscal 2020 EBITDA.
WBA plans to use sale proceeds for a mix of debt reduction and strategic investments. Fitch calculates the company would need to use approximately $2 billion of proceeds toward debt reduction to make the transaction leverage neutral, given the EBITDA loss. Remaining proceeds are expected to be deployed toward strategic investments, including the accelerated $750 million investment in primary care clinic operator VillageMD, bringing WBA's overall stake to 30% for a $1 billion investment.
EBITDA Declines: WBA's current rating profile reflects its historical ability to use its scale, customer connections and networks of partnerships and relationships to successfully navigate and gain share in the complex, albeit growing, pharmaceutical business. While cost pressures related to declining reimbursement rates and more recently the coronavirus pandemic has negatively impacted many drugstore operators and retailers, WBA's significant EBITDA decline in two years, despite stable top-line and ongoing cost reduction efforts, well exceeds trends of drugstore peers and raises questions regarding WBA's ability to stabilize and improve results. EBITDA fell nearly 30% to $6.4 billion in fiscal 2020 from $8.9 billion in fiscal 2018 even with 6% revenue growth over the two-year period and benefits from a cost reduction program begun in April 2019, with the current goal of achieving $2 billion in gross annualized cost savings by fiscal 2022.
Coronavirus Impact: Approximately $1.2 billion of the EBITDA decline over fiscal 2018 to fiscal 2020, or nearly half of the total, is due to the coronavirus pandemic, which has impacted WBA in several ways. First, U.K. retail revenue has been weak, resulting from shelter in place activity and reduced sales in higher-margin discretionary categories like cosmetics. While overall company revenue grew 2.0% to $140 billion in fiscal 2020 on strength in the U.S., margins were negatively impacted by several factors, including mix shifts toward lower margin consumable categories.
The magnitude of these operating challenges has been surprising and appear somewhat outsized relative to drugstore peers, particularly given WBA's stable revenue performance during fiscal 2020 (ended August 2020). The onset of the pandemic coincided with the beginning of WBA's fiscal 2H20, and consequently the $1.2 billion EBITDA impact represents approximately 30% of WBA's 2H19 total EBITDA. Assuming no further lockdown activity, the company has estimated the impact of the pandemic on EBITDA in fiscal 1H21 could be another $500 million to $600 million, yielding up to $1.8 billion in annualized impact (or just over 20% of fiscal 2019 EBITDA).
CVS Health Corporation's June 2020 quarter retail operating income (the company does not report segment EBITDA) declined approximately 37%, better than WBA's approximately 50% operating income (EBIT) decline in the May 2020 quarter; CVS's September quarter operating income declined 7% whereas WBA's operating income declined around 25% in the August quarter. Rite Aid's retail business saw approximately 25% EBITDA decline in the May 2020 quarter and actually grew over 30% in the August 2020 quarter, compared with WBA's EBITDA declines of around 40% and 20% in the same periods relative to fiscal 2019. These retailers are expected to see calendar 2020 impacts well below WBA's approximate 20% level. Walmart, Inc. (AA/Stable) and Target Corp (A-/Stable), meanwhile, have reported EBITDA increases during the nine months ended October 2020, with some benefit from strong grocery sales.
Gross Margin Pressure: In addition to the impact of the coronavirus, WBA has experienced ongoing U.S. pharmaceutical gross margin pressure. Structural margin pressure over the longer term has been a consequence of increased penetration of the government as a pharmaceutical payer under the Medicare and Medicaid programs, ongoing pressure from commercial payers and a mix shift toward the '90-day at retail' offering. Projected margins may also be affected by the growth in preferred/narrow networks, as WBA sacrifices margin for network inclusion to drive volume. This pressure was somewhat mitigated by the growth in generic penetration over the last few years, though this has tapered off somewhat given a lighter calendar of branded expirations.
Gross margin pressure intensified in fiscal 2019, yielding a nearly $600 million decline in gross profit dollars despite 11% top-line expansion, which was partially due to the purchase of Rite Aid stores. Reimbursement pressure is the primary culprit though declining margins are also likely due to a combination of weaker generic pricing and stagnant front-end comps. Fitch has assumed that a significant level of the approximately $550 million in fiscal 2020 EBITDA declines not explained by the pandemic are due to continued reimbursement rate pressure. Gross margin in fiscal 2H20 declined approximately 240bps, significantly greater than Fitch's prior assumption of a 30bps to 50bps decline in gross margin annually.
Fitch notes that 2020 EBITDA declines may have actually been worse without the benefit from its cost reduction program. Therefore, the company's inability to mitigate margin declines through effective contract renegotiations or compensating growth in volume is a growing concern.
Based on WBA's fiscal 2021 guidance, Fitch assumes EBITDA could be around $6.4 billion, flat to fiscal 2020. The company sees $500 million to $600 million in headwinds from the coronavirus in fiscal 1H21, suggesting it either expects only around half of the fiscal 2020 impact to reverse in fiscal 2H21 or other cost pressures like reimbursement pressure will continue to be headwinds. Fitch's current base case, assumes EBITDA resumes growth in fiscal 2021 and approaches $7 billion by fiscal 2023, as coronavirus headwinds subside and WBA benefits from its cost reduction activities.
Lack of Financial Targets/Recently Inconsistent Capital Deployment: WBA has declined to offer a public leverage target largely given its desire to maintain flexibility around strategic investments, though it had developed a good track record of maintaining adjusted debt/EBITDAR under 3.5x through fiscal 2018. In fiscal 2019, however, EBITDA declined 9% and WBA elected to borrow $2.5 billion to support $4.2 billion of stock buybacks, yielding adjusted debt/EBITDAR of 3.9x.
Given heightened operating challenges, the company announced the suspension of share buybacks on July 9, 2020 (after buying back $1.7 billion of shares in fiscal 2020) and paid down $1 billion of debt during fiscal 2020, with adjusted leverage finishing the fiscal year at 4.6x given EBITDA declines plus around 0.25x impact from its new variable rent disclosure. On its fiscal 4Q20 earnings call, the company indicated it did not expect to buyback equity beyond modest antidilutive purchases, but did not detail its FCF priorities or balance sheet targets.
Fitch expects WBA to generate around $2 billion of FCF after $1.7 billion in dividends annually, similar to fiscal 2020 levels, in addition to the $6 billion of proceeds from the distribution business sale. The company ended fiscal 2020 with approximately $2.6 billion in outstanding CP and revolver borrowings, and has approximately $500 million, $1.25 billion and $1.2 billion in unsecured notes, respectively due over the next three fiscal years beginning fiscal 2021. WBA would need to use FCF and $2 billion to $4 billion in asset sale proceeds to pay down debt to drive adjusted leverage below 4.0x in fiscal 2022, assuming EBITDA rebounds to the $6.2 billion (Fitch's current projection) to $6.6 billion range from around $5.8 billion on a pro forma fiscal 2020 basis following the asset sale.
Front-End Competition from Online Players: Prior to fiscal 2017, front-end sales grew modestly, generally showing resilience to competition from channels including discounters and online. Fitch believes that WBA's low front-end ticket at less than $10 in most cases, convenience model and purchase immediacy allowed it to effectively compete against new entrants. Front-end comps turned modestly negative in fiscal 2017 and were -2.4% in both fiscal 2018 and fiscal 2019; comps in fiscal 2020 improved to positive 1.6%, largely due to coronavirus-related benefits in the second half of the fiscal year.
Fitch believes sluggish front-end results suggest the company's resilience to alternate channels may be somewhat dissipating with more free shipping offers and faster delivery options from online merchants, and increased square footage from dollar stores and discounters. Investments in more robust omnichannel models from competitors like Walmart, Inc. (AA/Stable), Target Corp (A-/Stable) and Amazon, which have resulted in recent general merchandise share gains, could also be impacting WBA's front-end sales trajectory.
WBA has focused front-end efforts on emphasizing health and wellness and exploiting private brands in beauty and other categories to drive traffic. Its recent partnership with Kroger could unlock learnings around front-end merchandising and operations to optimize sales. While fiscal 2021 front-end comps could be modestly negative on difficult comparisons, Fitch expects flattish results over the longer term.
Pharmacy Market Share Gains Expected to Continue: WBA and CVS's retail operations lead the U.S. prescription market with approximately 20% share each. WBA has driven market share through execution and scale benefits. As a leading market player with strong loyalty from a sticky customer base, WBA is a preferred retail partner and can compete effectively for inclusion in pharmacy networks with acceptable financial terms. WBA's size also permits cost-effective pharmaceuticals buying, enhanced by its partnership with wholesaler ABC, to leverage the combined buying scale.
As a result of WBA's scale and execution, the company has built a long track record of growth, including U.S. comparable pharmacy average five-year growth of around 4%, with 3.2% growth in fiscal 2020. This growth reflects market share gains in light of the structural challenges facing the retail pharmacy space. Industry challenges, such as increased concentration of payers (including the government), mail-order, and narrow networks, have not had a negative impact on Walgreens' volume growth and, in Fitch's view, have likely helped it gain share against smaller operators and independents. However, these challenges have materially dampened gross margins, with U.S. retail (including pharmacy and front-end) margins of 20.8% in fiscal 2020, compared with the 27% range in fiscal 2015 and 2016.
Unlike many other retail categories, Fitch views pharmacies as having limited competition from new formats given fixed-price contracts and pharmacist supply constraints. Mail-order, which emerged as a major threat to retailers over the past several decades, appears to have peaked, particularly given '90-day at retail' offers across the industry as well as a number of branded drugs shifting to over-the-counter.
Amazon.com, Inc. (A+/Positive) could prove an emerging threat in the pharmaceutical space, particularly given its acquisition of mail order pharmacy company Pillpack. However, Pillpack's growth would likely take share from incumbent mail order players as opposed to retail pharmacies given consumer preferences, with copay structures somewhat limiting Amazon's ability to undercut competitors on consumer prices.
Despite overall market strength, WBA is underpenetrated in specialty pharmaceuticals relative to the market and competitors such as CVS, which has made targeted investments into the specialty category and benefits from its purchase of pharmacy benefits manager (PBM) and mail-order operator Caremark in 2006. CVS currently has an approximately 25% share of the U.S. specialty market, a market share which Fitch estimates at more than twice that of Walgreens. As specialty pharmaceutical growth will dominate overall spending growth over the next few years, WBA is somewhat structurally disadvantaged. The company's 2017 strategic alliance to combine its specialty pharmacy business with Prime Therapeutics LLC could improve its growth profile over time while benefiting from scale efficiencies.
In March 2013, WBA and wholesaler AmerisourceBergen Corp. (ABC, A-/Stable) announced a 10-year agreement (subsequently extended to 2026 and now to 2029 as part of the asset sale agreement) to source branded and generic drugs through a strategic partnership that would enable sharing of synergies by layering ABC's generic volume into WBA. WBA currently owns approximately 28% (29% following the close of the asset sale) of ABC, which has a total market value of approximately $22 billion as of the January 7 closing price. Walgreen's equity investment in ABC as well as the upside of its approximately 30% stake in VillageMD (following the upsized investment) provide a significant liquidity source to fund any future transactions (M&A, equity buyback, debt paydown) or strategic investments.
DERIVATION SUMMARY
WBA's rating profile, relative to retail peers, reflects its historical ability to use its scale, customer connections and networks of partnerships and relationships to successfully navigate and gain share in the complex, albeit growing, pharmaceutical business. While cost pressures related to declining reimbursement rates and more recently the coronavirus pandemic has negatively impacted many drugstore operators and retailers, the nearly 30% EBITDA decline in two years despite stable top-line and ongoing cost reduction efforts well exceed trends of drugstore peers and give rise to questions regarding WBA's ability to stabilize and improve results.
WBA's Negative Outlook reflects ongoing operational challenges, which have caused EBITDA to materially decline to $6.4 billion in fiscal 2020 (ending August 2020) from an $8.9 billion peak in fiscal 2018, with limited confidence in a near term rebound in performance. To stabilize its Outlook, Walgreens would need to demonstrate stabilizing results in fiscal 2021 and good topline and EBITDA growth beginning fiscal 2022 which, alongside debt reduction, would yield adjusted leverage sustaining below 4.0x. Demonstration of revenue and EBITDA growth would also improve Fitch's confidence in WBA's ability to expand market share and EBITDA longer term, commensurate with its current credit profile.
WBA's only Fitch-rated drug retail peer is Rite Aid Corporation, whose 'B-'/Stable ratings reflect continued operational challenges, which have heightened questions regarding the company's longer-term market position and the sustainability of its capital structure. Persistent EBITDA declines have led to negligible to modestly negative FCF and elevated adjusted debt/EBITDAR in the low 7.0x range. Mitigating factors to these concerns continue to including Rite Aid's ample liquidity of well over $1 billion, supported by a rich asset base of pharmaceutical inventory and prescription files. Other positives include the somewhat more stable EnvisionRx pharmacy benefits manager (PBM) business, representing around 30% of total EBITDA, and Rite Aid's good real estate position in local markets, somewhat mitigated by lack of broad-based national presence.
Beyond drugstore peers, Fitch considers retail peers that are similarly rated in evaluating WBA's rating. AutoNation's 'BBB-'/Stable' rating reflects its leading position in the auto retail segment and history of good cash flows, which allows it to invest in growth initiatives while effectively managing through an inherently cyclical automotive industry. In a downturn, Fitch expects AutoNation to benefit from its ability to control expenses and its exposure to alternate revenue streams like parts and service, both of which should somewhat protect EBITDA in an environment of weakening new car sales. Fitch expects leverage to trend below 3.25x over time, recognizing it could temporarily increase above these levels in a severe downturn.
AutoZone Inc. (BBB/Stable) is a leader in the somewhat narrow auto parts and accessories aftermarket with a strong track record of sales and EBITDA growth over many years. Adjusted debt/EBITDAR is expected to trend in the high-2.0x range over time, assume EBITDA growth is mitigated by debt-financed share repurchases over time, in line with the company's publicly articulated financial policy.
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for the issuer include:
Fitch projects fiscal 2021 (ending August 2021) revenue of approximately $141 billion, slightly above the $139.5 billion recorded in fiscal 2020; revenue growth could be somewhat negative in 1H21 on ongoing traffic challenges in the U.K., improving in 2H21 on easier comparisons due to the onset of the coronavirus pandemic. Beginning 2022, Fitch projects WBA could produce organic revenue growth of approximately 2% per year, driven by around 3% U.S. pharmacy comps, flattish U.S. front-end comps, and modest growth in the company's international retail and wholesale businesses. Assuming the ABC transaction closes around the end of WBA's fiscal 2021, fiscal 2022 revenue would be negatively impacted by around $20 billion.
EBITDA, which declined to $6.4 billion in fiscal 2020 from $8.9 billion in fiscal 2018, is expected to remain close to fiscal 2020 levels in fiscal 2021. The pandemic, which negatively impacted fiscal 2020 by approximately $1.2 billion, could negatively impact 1H21 by up to $600 million but 2H21 should benefit from lapping the pandemic's onset, providing a neutral to modestly positive EBITDA benefit to the full year relative to fiscal 2020. Ongoing reimbursement rate pressure is expected to be mitigated by WBA's cost reduction efforts. Beginning fiscal 2022, Fitch would expect WBA to show good EBITDA growth, in line to above revenue growth, on cost reduction benefits and easing of coronavirus cost pressures. The sale of the distribution business would reduce EBITDA by approximately $540 million on an annual basis.
Annual FCF after dividends declined to around $2 billion in fiscal 2019 and 2020 from the $5 billion range in fiscal 2018, and is expected to remain around $2 billion annually beginning fiscal 2021. WBA's plans to grow capex to $1.7 billion in fiscal 2021 from $1.4 billion in fiscal 2020 could provide some headwinds, mitigated somewhat by efforts to reduce working capital. Dividends are projected at $1.7 billion annually, or around $2.00 per share. The company suspended share buybacks during fiscal 2020 and has indicated an intention not to buy back shares in fiscal 2021 beyond modest antidilutive repurchases. The distribution business sale could reduce FCF by $200 million to $300 million annually, as EBITDA loss is mitigated by reduced interest expense.
Adjusted debt/EBITDAR (capitalizing leases at 8x), which trended below 3.5x prior to fiscal 2018 (adjusting for prefunded and ultimately repaid debt associated with the proposed acquisition of Rite Aid in its entirety), climbed to 3.9x in fiscal 2019 on EBITDA declines and debt issuance. Adjusted debt/EBITDAR rose further to 4.6x in fiscal 2020 on EBITDA declines, despite around $1 billion of debt reduction. Adjusted debt/EBITDAR beginning fiscal 2020 is higher by approximate 0.25x annually due to the addition of variable rent in WBA's disclosures.
Fitch's base case forecast, prior to the announcement of the distribution business sale, assumed that WBA generates around $6.6 billion in EBITDA in fiscal 2022 and repays approximately $4 billion of debt during fiscal 2021 and fiscal 2022, resulting in leverage in the low 4x range. To support its current 'BBB-' rating, WBA would need to drive EBITDA to the low to mid $6 billion range by fiscal 2022, factoring in the EBITDA loss from the asset sale, and repay debt with FCF and the contemplated asset sale such that adjusted debt/EBITDAR improved to below 4.0x.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to a positive rating action/upgrade:
Fitch could stabilize WBA's rating with greater confidence that a combination of EBITDA improvement to the low to mid $6 billion range (on a pro forma basis) and debt reduction from both FCF and the contemplated asset sale could yield adjusted debt/EBITDAR sustaining below 4x;
An upgrade could occur from 4%-5% revenue growth and EBITDA margins in the low to mid 5% range, leading to sustained EBITDA growth over $7 billion. WBA would also need to direct FCF toward debt reduction, yielding sustained adjusted debt/EBITDAR (capitalizing leases at 8x) below 3.5x.
Factors that could, individually or collectively, lead to a negative rating action/downgrade:
A downgrade could occur from WBA's inability to reduce adjusted debt/EBITDAR below 4x due to a combination of market share erosion, greater-than-expected margin pressure, and a financial policy which favored share buybacks instead of debt reduction. Negative rating action could also result from reduced confidence in WBA's ability to grow market share, revenue and EBITDA longer term.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit https://www.fitchratings.com/site/re/10111579.
LIQUIDITY AND DEBT STRUCTURE
As of Aug. 31, 2020, the company had total liquidity of around $10.5 billion supported by $516 million in cash and approximately $10 billion of availability under its various revolving credit facilities, net of approximately $0.5 billion LOCs, $1.1 billion in borrowings and $1.5 billion in outstanding CP. The company is known to enter into various credit facilities which can include unsecured term loan facilities and short dated revolving facilities under agreements which are subject to various expirations ranging from 2021 to 2023.
Following the onset of the coronavirus pandemic, the company took a number of actions to strengthen liquidity including suspension of the company's share repurchase activity on July 9, 2020 (after buying back $1.7 billion of shares in fiscal 2020). Additionally, in April 2020, the company took a number of actions, both the extension of and entrance into new revolvers which increased available commitments by around $3.6 billion. In August 2020, the company established a EUR1.0 billion CP program under the Joint HM Treasury to facilitate access to the Bank of England's 'COVID Corporate Financing Facility' Program.
WBA's debt as of Aug. 31, 2020, totaled approximately $15.8 billion exclusive of any discounts and unamortized financing costs. Debt consists of $2.6 billion of CP and credit facility borrowings, $12.8 billion in unsecured bonds, and around $440 million in other borrowings. Excluding outstanding CP borrowings, facility borrowings and other debt, near term maturities include approximately $500 million (which matured in November 2020), $1.25 billion and $1.2 billion in unsecured notes, respectively due over the next three fiscal years beginning fiscal 2021, which Fitch assumes will be paid down with FCF.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch adjusts for share based compensation, LIFO provision, acquisition related costs, store optimization, restructuring, and certain legal settlements. For example, Fitch removed approximately $225 million and $3 billion from cost of goods sold and operating expenses respectively for the year ended Aug. 31, 2020.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg
RATING ACTIONS
ENTITY/DEBT RATING PRIOR
Walgreens Boots Alliance, Inc. LT IDR BBB- Affirmed BBB-
ST IDR F3 Affirmed F3
senior unsecured
LT BBB- Affirmed BBB-
senior unsecured
ST F3 Affirmed F3
Walgreen Co.
senior unsecured
LT BBB- Affirmed BBB-
VIEW ADDITIONAL RATING DETAILS
Additional information is available on www.fitchratings.com
WALGREENS BOOTS ALLIANCE, INC. 
