Rite Aid offers to exchange $600 million 6 1/8% notes due 2023 for 7˝% notes due 2025

By Wendy Van Sickle

Columbus, Ohio, Jan. 6 – Rite Aid Corp. began an offer to exchange up to $600 million of its outstanding $1,753,490,000 6 1/8% senior notes due 2023 for newly issued 7˝% senior secured notes due 2025.

The purpose of the exchange offer is to improve the Company’s maturity profile by extending the maturity date of a portion of the old notes to July 2025 from April 2023, the company said in a news release.

The company is offering a total consideration of $1,000 of new notes for each $1,000 principal amount of old notes tendered for exchange by 5 p.m. ET on Jan. 17, the early deadline. The total consideration includes an early premium of $50 of new notes 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 $950 of new notes per $1,000 principal amount of existing notes.

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 Feb. 3

If the exchange offer is oversubscribed, the company will accept tendered notes for exchange on a pro rata basis; however, all notes tendered at or prior to the early tender date will be accepted for exchange before any notes tendered after the early deadline are accepted.

The company said it does not expect to increase the exchange cap. As of Nov. 30, $600 million is the maximum amount of incremental secured debt that can be issued under Rite Aid's old notes indenture without reducing the company's borrowing capacity under its revolving credit facilities

The offer is subject to a minimum condition of at least $250 million of old notes being tendered for exchange.

Settlement is expected to occur within two business days of the offer expiring.

Tenders may be withdrawn at or prior to 5 p.m. ET on Jan. 17.

Global Bondholder Services Corp. (866 470-3900, 212 430-3774, contact@gbsc-usa.com or http://gbsc-usa.com/eligibility/riteaid) is the information and exchange agent.

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

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