Rite Aid Corporation (NYSE: RAD) today provided an update on its previously announced debt refinancing transactions that would extend the maturity of a portion of its outstanding indebtedness and lower interest expense. The refinancing transactions are now 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 and a cash tender offer for Rite Aid’s $410.0 million aggregate principal amount of 9.750% Senior Secured Notes due 2016 with the proceeds of a new $1.125 billion first lien term loan, together with borrowings under the amended revolving credit facility. Rite Aid has currently received signed commitments for a $1.5 billion revolving credit facility. To the extent that Rite Aid receives additional commitments for the revolving credit facility, these proceeds will be used to prepay a portion of its $331.7 million Tranche 5 Term Loan due 2018;
- a cash tender offer for Rite Aid’s $470.0 million aggregate principal amount of 10.375% Senior Secured Notes due 2016 with the proceeds from a new $470 million second lien term loan,together with borrowings under the amended revolving credit facility ; and
- a cash tender offer for Rite Aid’s $180.3 million aggregate principal amount of 6.875% Senior Debentures due 2013 with available cash.
These refinancing transactions 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.
Rite Aid intends to redeem any 9.750% Notes and 10.375% Notes not tendered in the tender offers and related consent solicitations. Rite Aid intends to satisfy and discharge any 6.875% Debentures that remain outstanding after the tender offer and consent solicitation. Holders of untendered 6.875% Debentures that are satisfied and discharged will continue to receive regular interest payments and repayment of their 6.875% Debentures will be made at maturity on Aug. 15, 2013.
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