Rite Aid Shares Sink on Refinancing Plans

Rite Aid(RAD Quote) shares tumbled in morning trading, after the drugstore said it plans to offer $400 million in senior secured notes, due in 2016, as part of a refinancing plan.

In response, shares of the company sank more than 5% to $1.64 in morning trading.

Rite Aid had previously announced its desire to refinance some of its debt, due in September 2010. The refinancing also includes a $525 million term loan due June 2015 and $1 billion senior secured revolving credit agreement due September 2012. Rite Aid has currently secured $900 million in commitments.

The loan's proceeds will help refinance a $145 million term loan due September 2010 and will also help to repay and cancel part of the outstanding commitments on Rite Aid's $1.75 billion senior secured revolving credit facility. What's left will go towards other fees and expenses. ...