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Syndication underway for Rite Aid’s $1.8 billion bridge loan, to be taken out with bonds via Citi
By Paul A. Harris
Portland, Ore., Feb. 18 – A syndication effort is underway for Rite Aid Corp.’s $1.8 billion senior unsecured bridge loan, according to a high-yield portfolio manager.
The bridge is expected to be taken out with junk bonds in a deal to be led by Citigroup, sources say.
The loan backing the $1.8 billion cash portion of Rite Aid’s $2 billion acquisition of Twinsburg, Ohio-based pharmacy benefit management company Envision Pharmaceutical Services (EnvisionRx) is priced at Libor plus 600 basis points with a 1% Libor floor. It is capped at 9¼%; however, that rate would increase to 9½% after 120 days. Participants receive a 50 bps fee.
As reported, Rite Aid expects to come to the market during the March-April timeframe.
Rite Aid is a Camp Hill, Pa.-based drugstore chain.
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