By Paul A. Harris
St. Louis, Jan. 4 - Rite Aid Corp. priced $200 million of 10-year senior secured second-lien notes (B2/B+) at par to yield 7½% in a quick-to-market transaction on Tuesday, according to market source.
Price talk was 7 3/8% to 7 5/8%.
Citigroup ran the books for the Rule 144A issue.
Proceeds will be used to repay at maturity the company's 7 5/8% senior notes due April 2005 and its 6% fixed-rate senior notes due December 2005. Until the maturity dates, Rite Aid intends to use proceeds to repay temporarily borrowings under its revolving credit facility and obligations under its accounts receivable securitization program.
The issuer is a Camp Hill, Pa., drugstore chain that operates about 3,400 stores in 28 states and the District of Columbia.
| Issuer: | Rite Aid Corp.
|
| Amount: | $200 million
|
| Maturity: | Jan. 15, 2015
|
| Security description: | Senior secured second-lien notes
|
| Bookrunner: | Citigroup
|
| Coupon: | 7½%
|
| Price: | Par
|
| Yield: | 7½%
|
| Spread: | 320 basis points
|
| Call features: | Make-whole call at Treasuries plus 75 basis points until Jan. 15, 2010, then callable at 103.75, 102.50, 101.25, par on and after Jan. 15, 2013
|
| Equity clawback: | Until Jan. 15, 2008 for 35% at 107.50
|
| Pricing date: | Jan. 4
|
| Settlement date: | Jan. 11
|
| Ratings: | Moody's: B2
|
| Standard & Poor's: B+
|
| Price talk: | 7 3/8%-7 5/8%
|
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