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TEXT-S&P on General Nutrition Centers Inc

Thu Aug 2, 2012 3:20pm EDT

Aug 2 - Standard & Poor's Ratings Services said today that its 'BB' rating
on General Nutrition Centers Inc.'s tranche B term loan facility due March 2,
2018, remains unchanged following the $200 million increase in the term loan.
The '3' recovery rating, indicating our expectation of meaningful (50% to 70%)
recovery for holders in the event of a payment default, also remains unchanged.
With the completion of the add-on, the company has $1.1 billion outstanding on
the $1.4 billion tranche B term loan facility. 

We expect the company to use proceeds to partially fund the previously 
announced $300 million share repurchase program by GNC Holdings Inc., General 
Nutrition's parent, and for general corporate purposes.

The amendment to the credit agreement for the incremental term loan has the 
same terms, including interest rate, and conditions as the original facility. 
The restricted payment covenant was also amended to permit General Nutrition 
Centers to pay GNC Holdings an additional $50 million of cash dividends. GNC 
Holdings and General Nutrition Center's direct and indirect domestic 
subsidiaries guarantee the company's credit facility.

The ratings on GNC Holdings and its wholly owned subsidiary General Nutrition 
Centers reflect our assessment that the company's financial risk profile is 
"significant," given its good cash flow generation, stable credit metrics, and 
more moderate financial policies. In our view, the company's business risk 
profile is "fair," reflecting GNC's leading position in the highly competitive 
and fragmented nutritional supplement specialty retail sector, good 
profitability measures, and our expectation for near-term sales growth to be 
above the industry average of 3% to 6%.


RELATED CRITERIA AND RESEARCH
     -- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008
     -- 2008 Corporate Criteria: Rating Each Issue, April 15, 2008

RATING LIST

GNC Holdings Inc.
General Nutrition Centers Inc.
 Corporate Credit Rating                 BB/Stable/--

General Nutrition Centers Inc.
 $1.4 bil. tranche B term loan fac       BB
   Recovery Rating                       3
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