McKesson Falls On Financing Worries For Pharmacies

A McKesson spokesman said the company does not detail its relationships with individual customers.

Muken also said McKesson, of San Francisco, is likely to face greater competition from Cardinal Health Inc., and could lose revenue after renegotiating a contract with a large customer.

Moody's has a "Negative" outlook on Rite Aid and a "Caa2" corporate family rating, which is eight notches into non-investment grade "junk" status. The service said in January that Rite Aid has limited liquidity and a capital structure that was probably not sustainable. The Camp Hill, Pa., company owes about $6.1 billion to various creditors.

Rite Aid spokeswoman Karen Rugen said Moody's has taken a "very conservative view of our business model," and noted that Moody's has had the same view of Rite Aid since January.

Rugen said Rite Aid has made progress in improving its management team, operating more efficiently, reducing inventory and trimming capital spending. She said the company has sufficient funds to keep operating and doesn't have any significant loans due until September 2010.

Rite Aid expects to be able to refinance those loans, and expects to start paying down its debt later this year, Rugen said.