PetSmart Inc. subsidiary Chewy Inc. recently filed an S-1 to IPO, although the timing, amount of funds that could be raised, and use of proceeds that would be received by PetSmart is not clear. We believe a successful IPO with proceeds used to repay debt, along with operational improvements at PetSmart, would increase the possibility for lenders to be repaid at par. As a result, we are revising the outlook to developing from negative and affirming our 'CCC' issuer credit rating on PetSmart. The developing outlook reflects our view that either an upgrade or a downgrade is possible over the next year, largely dependent on the success of a Chewy IPO, operating performance of PetSmart, and whether we believe the
