Rite Aid reveals talk on $3.1 billion credit facility with launch

By Sara Rosenberg

New York, Feb. 1 - Rite Aid Corp. came out with structure and price talk on its $3,095,000,000 credit facility as the deal launched with a conference call at 10 a.m. ET on Friday, according to a market source.

The facility consists of a $1,725,000,000 five-year ABL revolver, a $900 million seven-year first-lien term loan and a $470 million 71/2-year second-lien term loan, the source said.

Pricing on the revolver can range from Libor plus 225 basis points to 275 bps based on excess availability, talk on the first-lien term loan is Libor plus 325 bps with a 1.25% Libor floor and an original issue discount of 991/2, and talk on the second-lien term loan is Libor plus 500 bps with a 1.25% Libor floor and a discount of 99.

The first-lien term loan has 101 soft call protection for six months, and the second-lien term loan has hard call protection of 103 in year one, 102 in year two and 101 in year three, the source said.

Wells Fargo Securities LLC, Citigroup Global Markets Inc., Bank of America Merrill Lynch, GE Capital Markets, Goldman Sachs & Co. and Morgan Stanley Senior Funding Inc. are the bookrunners on the deal, with Wells Fargo the left lead on the revolver and first-lien term loan, and Citigroup the left lead on the second-lien term loan. Citigroup is the administrative agent on the entire deal.

Commitments for the terms loans are due on Feb. 8 and revolver commitments are due on Feb. 15, the source added.

The company already has $1.5 billion in commitments for the revolver.

Proceeds will be used to refinance an existing $1.04 billion term loan-2 due 2014 and fund cash tender offers for $410 million of 9¾% senior secured notes due 2016, $470 million of 10 3/8% senior secured notes due 2016 and $180.3 million of 6 7/8% senior debentures due 2013.

The tender offers expire on Feb. 28.

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

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