Specialty pet retailer PetSmart Inc. entered into a definitive agreement to acquire online pet retailer Chewy Inc. for approximately $3 billion, which will be primarily funded with proceeds from a proposed $2 billion debt issuance and $1 billion common equity contribution from its sponsor, BC Partners. The transaction will result in weaker credit metrics. We are affirming our 'B+' corporate credit rating on PetSmart and removing the ratings from CreditWatch with negative implications. We are assigning our 'B+' issue-level ratings with a '3' recovery rating to the company's proposed $1.35 billion senior secured notes due 2025, and 'B-' issue-level rating with a '6' recovery rating to the proposed $650 million senior unsecured notes due 2025. At the same time, we
