PETSMART, INC.: Update to Discussion of Key Credit Factors

PetSmart, Inc.: Covenant Quality Pre-Sale Snapshot:$650m _% Senior Notes due 2025 - Covenant Quality Assessment – 2017/05/23 – US$ 750.00 – ...+ Cash leakage: (i) permits any RP so long as a 5.0x NLR is satisfied (ratio is not satisfied on issue date); (ii) accumulated credit (including a $264m up-front credit) of $593m (equates to 4% of total assets); (iii) no objective checks on affiliate transactions + Risky investments: (i) any restricted investment is permitted so long as a pro forma 5.25x net leverage ratio is satisfied (not satisfied on issue date); (ii) up-front credit can be used to make restricted investments; (iii) access to RP income basket to make restricted investments is not conditioned upon pro forma satisfaction of the $1 debt test and the no event of default test has been relaxed to require only no payment or bankruptcy event of default + Leveraging: (i) the Issuer is highly leveraged on the issue date (6.7x adj. EBITDA); (ii) very aggressive EBITDA add-backs + Liens subordination: (i) material initial and future liens subordination; (ii) general liens basket grows with EBITDA + CoC: (i) put is triggered by only...

PETSMART, INC.: Update Following change in Outlook to Negative - Credit Opinion – 2017/05/22 – US$ 250.00 – ...PetSmart's B1 Corporate Family Rating reflects the company's position as the largest specialty retailer of pet food, supplies and services in the U.S., with a well-known brand and broad national footprint. The ratings are constrained by the company's high leverage (6.5 times), integration risk associated with its acquisition of online pet products company, Chewy and aggressive financial policies as a result of its private equity ownership. The acquisition of Chewy, Inc. has the potential of being transformative for PetSmart as it will exponentially increase the company's online penetration which currently less than 5% of sales. The acquisition also offers cost synergies in advertising, vendor product costs and overhead. PetSmart's sizeable services offering also provides a highly defensible market position. The pet products industry in general remains relatively recession resilient, driven by factors such as the replenishment nature of consumables and services and increased pet ownership,...

Moody's confirms PetSmart's B1 CFR, changes outlook to negative - Rating Action – 2017/05/19 – US$ 180.00

PetSmart's Acquisition of Chewy Will Increase Leverage - Issuer Comment – 2017/04/24 – US$ 200.00

Moody's puts PetSmart ratings on Review for downgrade - Rating Action – 2017/04/19 – US$ 180.00

Moody's withdraws Petsmart's Speculative Grade Liquidity Rating - Announcement – 2016/12/08 – US$ 180.00

PetSmart, Inc.: Cash-funded dividend is credit negative; ratings not affected - Issuer Comment – 2016/02/22 – US$ 200.00

PetSmart, Inc.: Update to Discussion of Key Credit Factors - Credit Opinion – 2016/02/05 – US$ 250.00 – ...PetSmart's B1 Corporate Family Rating favorably reflects the company's position as the largest specialty retailer of pet food, supplies and services in the U.S., with a well-known brand and broad national footprint. The company's sizeable services offering provides a highly defensible market position. The pet products industry in general remains relatively recession-resilient, driven by factors such as the replenishment nature of consumables and services and increased pet ownership, driving the company's ability to sustainably grow revenue, expand profitability, and generate positive free cash flow. The rating is also further supported by the expectation for very good liquidity, as internally generated cash is expected to be more than sufficient to cover cash flow needs over the next twelve months, including sizeable interest expense, working capital and capital spending, with excess cash flow used for debt reduction. The B1 rating also reflects PetSmart's high debt and leverage stemming...

US Specialty Retail: PetSmarts sale of its minority stake in Banfield is credit positive; no impact on debt ratings - Issuer Comment – 2016/01/15 – US$ 200.00

Argos Merger Sub Inc. (to be merged with and into PetSmart, Inc.): Covenant Quality Pre-Sale Snapshot: $1,900m _% Senior Notes due 2023 - Covenant Quality Assessment – 2015/02/13 – US$ 750.00