Rite Aid prices upsized $525 million loan at 96 with 3% Libor floor

By Paul A. Harris

St. Louis, May 29 - Rite Aid Corp. priced its upsized $525 million term loan due 2015 at 96 on Friday, according to a market source.

The deal, which was upsized from $500 million after having been previously upsized from $400 million, is set to allocate on Tuesday or Wednesday.

The term loan comes with a 3% Libor floor and is callable immediately at 105, with the call premium declining to 103 after one year and to 101 after two years.

Citigroup, Bank of America, Wells Fargo and GE Capital are the joint lead arrangers on the deal, with Citi the left lead.

Proceeds will be used to refinance the company's $145 million term loan tranche 1 due 2010, and to repay and cancel a portion of the commitments outstanding under its revolver.

In conjunction with the term loan, the company launched an amendment to its existing credit facility to, among other things, allow for the new debt and the completion of a refinancing plan.

In an 8-K recently filed with the Securities and Exchange Commission, the company said that the new term loan is part of a comprehensive plan to refinance its September 2010 debt maturities, including its accounts receivable securitization programs.

The refinancing is hoped to be done through a combination of a new revolver, new term loans, the issuance of high-yield notes, which may be secured on a first- or second-priority basis or unsecured, or the entry into a new securitization program.

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

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