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Walgreens Boots (WBA; Ba2, BBB- Neg) 3Q24 (3m ending May)

CONSUMER STAPLES

$30s +30bps, equities -20%

Equities are pushing 27 year low in pre-market, market cap at ~$11b based on those moves should still keep D/E below 1. Interest expenses are down this year (YTD at $351m) and against adj. operating income of $2.4b (YTD) it left coverage at 6.8x. Moody's is less lenient in adjusting out WBA's pain points and had coverage at 1.9x against EBITA to end last year. Coverage is being held up by gross paydowns and a lack of refi activity (debt on legacy rates). It has $6b+ due over the next 2 years - funding costs on the once solid BBB name look a lot higher now as it moves into firm BB territory.

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