Rite Aid buys back $156 million notes in Q3, expects to buy back more

By Devika Patel

Knoxville, Tenn., Dec. 19 – Rite Aid Corp. bought back $156 million of debt last quarter and plans to keep reducing its leverage ratio and debt outstanding.

The company has no maturities until 2023.

“During the quarter, we also repurchased $156 million of our 2027 and 2028 notes, for an aggregate purchase price of $100 million,” chief financial officer Matt Schroeder said on the company’s third quarter ended Nov. 30 earnings conference call on Thursday.

“We recorded a gain on debt retirement of $56 million on this transaction and reduced our total debt outstanding by the same amount.

“Our liquidity of over $1.5 billion at quarter-end is very strong and, with no debt maturing until 2023, we have the flexibility and the runway to execute our strategic initiatives.

“We are laser-focused on to finding ways to both address the leverage ratio we have outstanding and the debt outstanding, so I think we’re going to keep an open mind on a variety of different things we can do there,” he said.

The company’s top executive agreed.

“We also took important steps to retire debt during the quarter,” chief executive officer Heyward Donigan said on the call.

“We will continue to prioritize improving our leverage ratio and our capital structure,” she said.

The company ended the quarter with a net debt balance of approximately $3.3 billion and a pro forma leverage ratio of 5.9x adjusted EBITDA.

Rite Aid is a Camp Hill, Pa.-based drugstore chain.

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