Fitch: CVS Caremark's Ratings Unaffected by $2B Share Repurchase Program

2008-05-22 01:07:41 -

- CVS Caremark Corporation (NYSE:CVS) has announced that its Board of Directors has approved a $2 billion share repurchase program and the company expects to repurchase shares in the open market from time to time, in 2008 and 2009.

Fitch expects CVS Caremark's credit profile to remain strong as the company has the ability to fund the program with free cash flow. Following CVS' merger with Caremark Corporation in March 2007, credit metrics for the combined company have strengthened, with EBITDAR coverage of interest and rents of 3.8 times (x) and total adjusted debt/EBITDAR of 2.6x for the twelve month period ending March 29, 2008 versus 2.3x and 3.6x, respectively, for standalone CVS at the end of 2006.

Fitch rates CVS Caremark as follows:

--Long-term Issuer Default Rating (IDR) 'BBB';

--Senior Unsecured Bank Facility 'BBB';

--Senior unsecured notes 'BBB';

--ECAPS hybrid security 'BBB-';

--Short-term IDR 'F2';

--Commercial Paper (CP) 'F2'.

The Rating Outlook is Stable.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. 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.

Fitch Ratings, New York
Monica Aggarwal, CFA, 212-908-0282
Karen Ghaffari, CFA, CPA, 212-908-0708
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