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To: Victor Lazlo who wrote (91127)	1/15/2000 2:03:00 PM
From: Glenn D. Rudolph	Respond to of 164684

Whether or not Rite Aid is oversold I don't know but I plan to look into it's fudementals sometime this weekend. Maybe they could bring in chainsaw Al Dunlap and the stock would get a pop! (just kidding there!) Victor, I have looked at Rite Aid's fundamentals and in my opinion it is hopeless now. The debt is too large. The inventory is too small and cannot be increase due tolack of any more ability to borrow. The leases are long term. The owned buildings need a lot of remodeling. The only hope is a reorganization and the bankruptcy cort forging a lot of debt with the downsizing in the number of units. Please tell me what you find. Thank you. Glenn

To: Victor Lazlo who wrote (91127)	1/15/2000 6:38:00 PM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 164684

Dow Jones Newswires -- January 13, 2000 Rite Aid Corporate Credit Cut To Single-B By S&P NEW YORK -- Standard & Poor's said it lowered its long-term ratings on Rite Aid Corp. and Rite Aid Lease Management Co. Also, S&P said it affirmed its short-term ratings on Rite Aid. All ratings were removed from CreditWatch, where they had been placed with negative implications Sept. 22, S&P said. The ratings outlook is developing, the ratings agency said. S&P said the downgrade "reflects the uncertainty regarding Rite Aid's financial condition due to the lack of financial statements since the fiscal 1999 second quarter (ended Aug. 28, 1998) and the expectation that additional reports may not be available until July 11, 2000." Rite Aid announced on Jan. 11 that it had reached agreements with its lenders under its credit facilities and other financing arrangements, representing about $3 billion of debt, to implement a deferred financial reporting program through July 11, S&P said. In addition, Rite Aid has not announced firm plans for asset divestitures and the company continues to be hurt by a front-end merchandizing strategy that is not producing satisfactory results, S&P said. "Management will be challenged to develop and implement operating and financial strategies to reverse the current negative trends. The company's highly leveraged balance sheet, past mistakes of prior management, and aggressive competitors could hinder progress. "Rite Aid also may have significant future liabilities stemming from shareholder lawsuits following the steep drop in the stock price after its January 1999 announcement of disappointing earnings and subsequent restatements of financial results. "Ratings could be lowered if the current audit leads to additional significant restatement of financials and/or shareholders' litigation claims result in a large cash settlement. The ratings could be raised if the completed audit indicates that Rite Aid's business is reasonably healthy. "A possible ratings upgrade also will depend on the company announcing finalized plans for asset divestitures," S&P said. RATINGS LOWERED AND REMOVED FROM CREDITWATCH NEGATIVE - Rite Aid Corp. TO FROM Long-term corporate credit B BB Senior unsecured debt B BB Bank loan B BB Subordinate debt CCC+ B+ Preliminary shelf: Senior unsecured debt B BB Subordinate debt CCC+ B+ Preferred stock CCC+ B+ - Rite Aid Lease Management Co. Corporate credit rating B BB Preferred stock CCC+ B+ RATINGS AFFIRMED AND REMOVED FROM CREDITWATCH NEGATIVE - Rite Aid Corp. RATING Short-term corporate credit B Commercial paper B