Rite Aid prices $150 million seven-year convertibles to yield 8.5%, up 27.5%

New York, May 22 - Rite Aid Corp. priced $150 million of seven-year convertible notes after the market close on Thursday to yield 8.5% with an initial conversion premium of 27.5%.

The deal came at the rich end of talk for a yield of 8.5% to 9% with an initial conversion premium of 22.5% to 27.5%.

Citigroup is the bookrunner of the notes, for which there is an option to purchase up to an additional $8 million in notes to cover over-allotments.

The conversion ratio is 386.3614.

The notes will be non-callable.

Rite Aid intends to use proceeds to redeem $150 million of its 6.125% senior notes due 2008.

Based in Camp Hill, Pa., Rite Aid operates a chain of retail drugstores.

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