Rite Aid launches cash tender offers for notes due 2027, 2028

By Marisa Wong

Los Angeles, Oct. 15 – Rite Aid Corp. said it has begun cash tender offers to purchase up to $100 million of its outstanding $270,461,000 7.7% senior notes due 2027 and $68,442,000 6 7/8% senior notes due 2028.

The company is offering a total consideration of $610 for each $1,000 principal amount of notes tendered by 5 p.m. ET on Oct. 28, the early tender date. The total consideration includes an early tender premium of $50 per $1,000 principal amount.

Holders who tender their notes after the early tender date will only be eligible to receive the tender consideration of $560 per $1,000 principal amount, or the total consideration less the early tender premium.

The company will also pay accrued interest to but excluding the applicable settlement date.

The offers will expire at 11:59 p.m. ET on Nov. 12.

If the aggregate amount of notes tendered exceeds the tender cap, the company will accept tendered notes for purchase on a pro rata basis; however, all notes tendered at or prior to the early tender date will be accepted for purchase before any notes tendered after the early deadline are accepted. If the offers are fully subscribed as of the early tender date, no notes tendered after the early tender date will be accepted for purchase.

The company said it reserves the right, but is under no obligation, to increase the maximum tender amount at any time.

Settlement is expected to occur on Oct. 30.

Tenders may be withdrawn at or prior to 5 p.m. ET on Oct. 28.

The company said it will pay a soliciting retail broker fee of $2.50 per $1,000 principal amount, provided that this fee will only be paid with respect to the first $200,000 aggregate principal amount of each series of notes tendered by any individual holder.

The company also announced that it recently completed a privately negotiated purchase from a noteholder and its affiliated funds of $84.1 million aggregate principal amount of the notes at the same purchase prices as the total consideration. The company intends to fund this privately negotiated repurchase and the tender offers with borrowings under its senior secured revolving credit facility and other available cash.

BofA Merrill Lynch (888 292-0070 or 980 388-3646) is the dealer manager for the offers. Global Bondholder Services Corp. (866 470-3900, 212 430-3774, contact@gbsc-usa.com or https://www.gbsc-usa.com/riteaid/) is the information agent and depositary.

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

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