Published on 5/3/2012 in the Prospect News High Yield Daily.
New Issue: Rite Aid prices $421 million tap of 9¼% notes due 2020 at 101.25
By Paul A. Harris
Portland, Ore., May 3 - Rite Aid Corp. priced a $421 million add-on to its 9¼% senior guaranteed notes due March 15, 2020 (Caa2/CCC/) at 101.25 on Thursday, according to a syndicate source.
The reoffer price, which came at the rich end of price talk, which was set in the 101 area, renders an 8.962% yield to worst.
Citigroup Global Markets Inc., Bank of America Merrill Lynch, Wells Fargo Securities LLC and Credit Suisse Securities (USA) LLC were the joint bookrunners for the quick-to-market add-on.
The deal features a change-of-control call giving the issuer the ability to redeem the notes at 110%, plus accrued interest if, prior to the first anniversary of the issue date, either a change of control occurs or the company has entered into a binding agreement that would constitute a change of control and such a change of control occurs within 180 days following the first anniversary of the issue date of the existing 9¼% senior guaranteed notes due 2020.
The Camp Hill, Pa.-based drugstore chain plans to use the proceeds to fund the tender offer for its 9 3/8% senior guaranteed notes due 2015.
The original $481 million issue priced at par on Feb. 14, 2012.
| Issuer: | Rite Aid Corp.
|
| Face amount: | $421 million
|
| Proceeds: | $426,263,000
|
| Maturity: | March 15, 2020
|
| Security description: | Add-on to 9¼% senior guaranteed notes due March 15, 2020
|
| Bookrunners: | Citigroup Global Markets Inc., Bank of America Merrill Lynch, Wells Fargo Securities LLC, Credit Suisse Securities (USA) LLC
|
| Coupon: | 9¼%
|
| Price: | 101.25
|
| Yield to worst: | 8.962%
|
| Spread: | 704 bps
|
| Call features: | Make-whole call at Treasuries plus 75 bps until March 15, 2016, then callable at 104.625, 102.313, par on and after March 15, 2018
|
| Equity clawback: | 35% at 109.25 until March 15, 2015
|
| Change-of-control put: | 101%
|
| Change-of-control call: | 110%
|
| Trade date: | May 3
|
| Settlement date: | May 15
|
| Ratings: | Moody's: Caa2
|
| Standard & Poor's: CCC
|
| Distribution: | Rule 144A and Regulation S with registration rights
|
| Price talk: | 101 area
|
| Marketing: | Quick-to-market
|
| Original issue: | $481 million issue priced at par on Feb. 14, 2012
|
| Total issue size: | $902 million
|
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