Published on 5/17/2007 in the Prospect News High Yield Daily.
New Issue: Rite-Aid prices $1.22 billion of senior notes in two parts
By Paul A. Harris
St. Louis, May 17 - Rite-Aid Corp. priced $1.22 billion of senior notes (Caa1/CCC+) in two tranches on Thursday, according to a market source.
The Camp Hill, Pa., drugstore chain priced an $810 million tranche of 9½% 10-year notes at 98.394 to yield 9¾%, on top of price talk.
Rite-Aid also priced a $410 million tranche of 9 3/8% 8.5-year notes at 98.540 to yield 9 5/8%. Price talk was 12.5 basis points to 25 bps behind the 10-year notes, bringing the 8.5-year notes at the wide end of the price talk.
Citigroup was the bookrunner for the Rule 144A and Regulation S deal. Wachovia Securities was the co-manager.
Proceeds together with an approximately $75 million draw upon the company's existing senior secured credit facility, a new $1.105 billion term loan and the 250 million shares of common stock will be used to fund the acquisition of the Brooks and Eckerd drugstore chains.
| Issuer: | Rite-Aid Corp.
|
| Amount: | $1.22 billion
|
| Security description: | Senior notes
|
| Bookrunner: | Citigroup
|
| Co-manager: | Wachovia Securities
|
| Trade date: | May 17
|
| Settlement date: | June 1
|
| Ratings: | Moody's: Caal
|
| Standard & Poor's: CCC+
|
| Distribution: | Rule 144A with registration rights/Regulation S
|
|
|
| 10-year notes
|
| Face amount: | $810 million
|
| Proceeds: | $797 million (approximate)
|
| Maturity: | June 15, 2017
|
| Coupon: | 9½%
|
| Price: | 98.394
|
| Yield: | 9¾%
|
| Spread: | 502 bps
|
| Call features: | Make-whole at Treasuries plus 75 bps until June 15, 2012, then at 104.75, 103.167, 101.583, par on and after June 15, 2015
|
| Price talk: | 9¾% area
|
|
|
| 8.5-year notes
|
| Face amount: | $410 million
|
| Proceeds: | $404 million (approximate)
|
| Maturity: | Dec. 15, 2015
|
| Coupon: | 9 3/8%
|
| Price: | 98.540
|
| Yield: | 9 5/8%
|
| Spread: | 489 bps
|
| Call features: | Make-whole call at Treasuries plus 75 bps until Dec. 15, 2011, then at 104.688, 102.344, par on and after Dec. 15, 2013
|
| Equity clawback: | Until Dec. 15, 2010 for 35% at 109.375
|
| Price talk: | 12.5 bps to 25 bps inside the 10-year notes
|
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