Rite Aid looking to get $200 million second-lien accounts receivable securitization term loan

By Sara Rosenberg

New York, Jan. 23 - Rite Aid Corp. plans on getting a new up to $200 million second-lien accounts receivable securitization term loan due Sept. 14, 2010, according to an 8-K filed with the Securities and Exchange Commission on Friday.

Citigroup is the lead arranger and bookrunner on the deal, and has committed to provide $100 million of the loan. The remaining $100 million will be syndicated on a best-efforts basis through the earlier of closing and Feb. 20.

Pricing on the loan is Libor plus 1,400 basis points.

The loan has 101 call protection against all optional and mandatory prepayments.

Security is second-priority liens on eligible third-party pharmaceutical receivables securing an existing facility.

Proceeds will be used to provide funding for the acquisition of receivables and/or participation interests therein.

Also on Friday, the company announced that it amended its existing receivables financing agreement, extending the commitment for 364 days until Jan. 21, 2010.

Citi, JPMorgan and Wachovia are the investor agents on the existing deal.

As part of the amendment, which was completed on Jan. 22, borrowing availability under the existing facility was reduced by about $100 million and there will be an additional roughly $100 million step-down on Feb. 20.

The new term loan is being obtained to replace the loss of borrowing availability under the existing receivables deal.

Rite Aid is a Camp Hill, Pa.-based operator of a chain of retail drugstores.

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