New Issue: Rite Aid sells $115 million mandatory at 7.0%, up 50%

Nashville, Jan. 26 - Rite Aid Corp. sold $115 million of three-year mandatory convertible preferreds at par of 50 with a 7.0% dividend and 50% initial conversion premium via bookrunner JPMorgan Securities Inc.

The registered deal priced at the cheap end of yield talk for a 6.5% to 7.0% dividend.

The Camp Hill, Pa.-based drugstore chain said it will use proceeds to redeem, at 105% plus any accrued dividends, its $103 million of series D cumulative convertible pay-in-kind preferreds. Any remaining net proceeds, the company said, will be used to purchase additional shares of series D preferred stock or for working capital and general corporate purposes.

Terms of the deal are:

Issuer:	Rite Aid Corp.
Issue:	Convertible mandatory preferreds
Bookrunner:	JPMorgan Securities Inc.
Co-manager:	Citigroup Global Markets Inc.
Amount:	$115 million
Greenshoe:	$10 million
Maturity:	Feb. 1, 2008
Dividend:	7.0%
Price:	Par, $50
Yield:	7.0%
Conversion premium:	50%
Conversion price:	$5.36
Conversion ratio:	9.3371
Contingent conversion:	No
Contingent payment:	No
Dividend protection:	Yes
Takeover protection:	Yes
Call:	Non-callable
Put:	No
Price talk:	6.5-7.0%, up 50%
Pricing date:	Jan. 25, after market close
Settlement date:	Jan. 31
Distribution:	Registered

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