Rite Aid launches $300 million of incremental credit facility debt

By Sara Rosenberg

New York, Oct. 19 - Rite Aid Corp. held a conference call on Monday morning to launch $300 million of incremental credit facility debt, according to a market source.

Citigroup is the left lead bank and a bookrunner on the deal, and Bank of America, Wells Fargo and Goldman Sachs are joint bookrunners as well.

The debt is comprised of a $125 million senior secured term loan add-on due June 2015 and a $175 million revolver add-on.

Pricing on the term loan add-on is Libor plus 650 basis points with a 3% Libor floor, and there is call protection of 105, 103, 101 - same as in the existing term loan.

Pricing on the revolver add-on matches existing revolver pricing at Libor plus 450 bps with a 3% Libor floor, the source continued.

With the add-ons, the total term loan size will increase to $650 million and the revolver size will increase to $1.175 billion.

Proceeds from the term loan, revolver borrowings and $250 million of new senior secured notes will be used to repay and cancel the company's accounts receivable securitization facilities. As of Oct. 16, there was $475 million outstanding under the securitization facilities.

Upon successful completion of the comprehensive plan, Rite Aid will have refinanced all of its September 2010 debt maturities.

Commitments towards the incremental debt are due from lenders on Tuesday morning.

Rite Aid is a Camp Hill, Pa.-based drugstore chain.

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