Rite Aid Corporation (NYSE: RAD) today announced that it has commenced a series of debt refinancing transactions that would extend the maturity of a portion of Rite Aid’s outstanding indebtedness and lower interest expense. The refinancing transactions are expected to include:
- the amendment and restatement of Rite Aid’s existing revolving credit facility;
- the refinancing of Rite Aid’s $1.039 billion Tranche 2 Term Loan due 2014 with the proceeds of a new term loan, together with borrowings under the amended revolving credit facility; and
- cash tender offers for Rite Aid’s $410.0 million aggregate principal amount of 9.750% Senior Secured Notes due 2016; $470.0 million aggregate principal amount of 10.375% Senior Secured Notes due 2016; and $180.3 million aggregate principal amount of 6.875% Senior Debentures due 2013, with the proceeds from new first and/or second lien term loans, together with borrowings under the amended revolving credit facility and available cash.
Rite Aid has not yet determined the amount of the amended revolving credit facility or new term loans. Rite Aid currently has signed commitments for a $1.5 billion revolving credit facility, which are subject to customary terms and conditions. Rite Aid’s results of operations and guidance will likely be impacted by fees, expenses and charges related to the refinancing transactions.
As part of the Tender Offers, Rite Aid is soliciting consents for amendments that would eliminate or modify certain covenants, events of default and other provisions contained in the indentures governing the Notes. Holders who tender their Notes will be deemed to consent to all of the proposed amendments applicable to that series and holders may not deliver consents without tendering their Notes. The Tender Offers and Consent Solicitations are being made pursuant to separate Offers to Purchase and Consent Solicitation Statements, each dated Jan. 31, 2013, and related Consents and Letters of Transmittal, which more fully set forth the terms and conditions of the Tender Offers and Consent Solicitations.
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