Rite Aid Corporation (NYSE: RAD) today announced the completion of its previously announced debt refinancing transactions that extend the maturity of a portion of its outstanding indebtedness and lower interest expense. The refinancing transactions included:
- the amendment and restatement of Rite Aid’s existing revolving credit facility, including an increase in the commitments under the revolving credit facility to $1.795 billion and an extension of the maturity to February 2018;
- the refinancing of Rite Aid’s $1.038 billion Tranche 2 Term Loan due 2014 and $331.7 million Tranche 5 Term Loan due 2018, each including accrued but unpaid interest, with the proceeds from a new $1.161 billion Tranche 6 Term Loan due 2020 under Rite Aid’s first lien credit facility, together with borrowings under the amended revolving credit facility;
- the refinancing of, via a cash tender offer, Rite Aid’s $410.0 million aggregate principal amount of 9.750% Senior Secured Notes due 2016 with proceeds from the Tranche 6 Term Loan, together with borrowings under the amended revolving credit facility;
- the refinancing of, via a cash tender offer, 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 Tranche 1 Term Loan due 2020 under Rite Aid’s new second lien credit facility, 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.
Rite Aid expects to record a loss on debt modifications of $117.0 million related to the transactions and expects to have annual cash interest savings of approximately $45.0 million.
As part of the tender offers, Rite Aid solicited consents for amendments that would eliminate or modify certain covenants, events of default and other provisions contained in the indentures governing each series of notes. Rite Aid announced today that it has received the requisite consents in each consent solicitation to execute a supplemental indenture to effect the proposed amendments.
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