Rite Aid gives results of exchange offer for 6 1/8% notes due 2023

By Sarah Lizee

Olympia, Wash., Jan. 21 – Rite Aid Corp. announced the early results of its 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.

As of 5 p.m. ET on Jan. 17, the early deadline, $1,633,938,000 of the existing notes, representing about 93.18% of the outstanding amount, were tendered for exchange. The company said it will accept for purchase the maximum amount, and since the amount tendered exceeded the cap, the notes will be accepted on a pro rata basis up to the cap, subject to a proration factor of about 36.74%. The balance of old notes not accepted for exchange will be returned to holders.

No more notes tendered in the exchange offer will be accepted for purchase.

As previously reported, 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 the early deadline. The total consideration includes an early premium of $50 of new notes per $1,000 principal amount.

Holders who tendered their notes after the early tender date would have only been 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 offer was previously set to expire at 11:59 p.m. ET on Feb. 3.

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

Settlement is slated for Feb. 5.

Tenders may no longer be withdrawn.

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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