Jean Coutu prices tenders for 7 5/8%, 8½% notes

By Jennifer Chiou

New York, May 30 - The Jean Coutu Group (PJC) Inc. said it determined the tender considerations to be paid for its 7 5/8% unsecured senior notes due 2012 and 8½% senior subordinated notes due 2014 at 2 p.m. ET on May 30.

For each $1,000 principal amount, the company said it will pay $1,079.43 for the 8½% notes and $1,059.20 for the 7 5/8% notes.

The tender consideration for each $1,000 principal amount of notes was calculated using the yield of the 3 5/8% U.S. Treasury note due July 15, 2009 plus 150 basis points.

The tender consideration includes a $35.00 consent payment for noteholders who tendered and delivered consents by 5 p.m. ET on May 31 for the 8½% notes and 5 p.m. ET on March 5 for the 7 5/8% notes, the consent expiration date. Noteholders who tender must consent to the proposed amendments.

The tender offers expire at 8 a.m. ET on June 14. The deadline was extended from May 25 and, previously, from April 26.

The company said it may accept the notes prior to the tender offer expiration if Rite Aid Corp.'s pending purchase of the Jean Coutu Group USA Inc. closes during the tender offer. If so, noteholders will receive payment on the second day following the company's acceptance of the notes.

Jean Coutu currently expects the acquisition to close on June 1 and also expects the early settlement date for the offer to occur on the same date.

As of May 24, 99.7% of the outstanding 8½% notes and more than 99.9% of the outstanding 7 5/8% notes had been tendered.

Because the company received consents from holders of a majority of the notes, it will be able to amend the indentures to eliminate most of the restrictive covenants.

The tender offer is conditioned upon the closing of the Rite Aid acquisition.

J.P. Morgan Securities Inc. (866 834-4666) is the dealer manager for the tender offer for the 7 5/8% notes, and Global Bondholder Services Corp. (866 540-1500) is the information agent for both offers.

Jean Coutu Group is a drugstore chain based in Longueuil, Quebec. Jean Coutu Group USA includes 1,858 drugstores, of which 337 are Brooks stores and 1,521 are Eckerd stores, and six distribution centers.

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