Rite-Aid ups planned bond issuance to $1.22 billion from $870 million

By Paul A. Harris

St. Louis, April 30 - Rite Aid Corp. disclosed in a 10-K filed on Monday with the Securities and Exchange Commission that it has increased to $1.22 billion from $870 million the notes it anticipates issuing in conjunction with its proposed acquisition of Jean Coutu Group USA Inc.

The bonds are backed by a bridge facility totaling $1.72 billion from Citigroup.

The company reiterated that it has $1.105 billion of tranche 2 term loans available under it senior secured credit facility and added that depending on the timing of the transaction as well as the actual fees and expenses, it may also draw upon its revolver.

"We had previously considered assuming 8½% senior secured notes due 2014 held by Jean Coutu Group as a component of the consideration for the acquisition," the filing stated.

"The Jean Coutu Group has initiated a tender offer for these notes and therefore we will not assume them. This has increased the amount of consideration that we intend to fund by the issuance of new debt from $1.45 billion to $2.3 billion."

Rite Aid is a Camp Hill, Pa., national drugstore chain.

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