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Rite Aid reduces pricing on first- and second-lien term loans
By Sara Rosenberg
New York, Feb. 5 - Rite Aid Corp. lowered the spread on its $900 million seven-year first-lien term loan (B1/B+) to Libor plus 300 basis points from Libor plus 325 bps and on its $470 million 71/2-year second-lien term loan (B3/B-) to Libor plus 475 bps from Libor plus 500 bps, according to a market source.
Also, the Libor floor on both term loans was revised to 1% from 1.25%.
Furthermore, the offer price tightened on the first-lien term loan to par from 99½ and on the second-lien term loan to par from 99, the source said.
The first-lien term loan still has 101 soft call protection for six months, and the second-lien term loan still has hard call protection of 103 in year one, 102 in year two and 101 in year three.
Commitments are due at the close of business on Wednesday, accelerated from Friday, the source added.
The company's $3,095,000,000 credit facility also includes a $1,725,000,000 five-year ABL revolver (B1) that has pricing ranging from Libor plus 225 bps to 275 bps based on excess availability.
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.
Proceeds will be used to refinance an existing $1.04 billion term loan 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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