On April 5, 2004, Standard&Poor's Ratings Services placed its ratings for CVS Corp. (A/A-1) on CreditWatch with negative implications. The action follows the Woonsocket, R.I.-based chain drug retailer's announcement that it has entered into a definitive agreement to acquire 1,260 Eckerd Stores, and the Pharmacy Benefit Managers (PBM)/mail order business for $2.15 billion in cash. CVS is planning on funding the transaction with short- and long-term debt. The transaction is subject to regulatory approvals and is expected to close in June 2004. Although the proposed transaction would strengthen CVS's competitive position in the South, the additional debt to fund the acquisition would weaken the company's financial profile. Moreover, the transaction increases the company's business risk, as the Eckerd
