New Issue: Rite Aid prices $1.8 billion eight-year notes at par to yield 6 1/8%

By Paul A. Harris

Portland, Ore., March 19 – Rite Aid Corp. priced a $1.8 billion issue of eight-year senior notes (B3/CCC+) at par to yield 6 1/8% on Thursday, according to a syndicate source.

The yield printed at the tight end of yield talk in the 6¼% area.

Citigroup Global Markets Inc., BofA Merrill Lynch, Wells Fargo Securities LLC, Credit Suisse Securities (USA) LLC and Goldman Sachs & Co. were the joint bookrunners.

The Camp Hill, Pa.-based drugstore chain plans to use the proceeds to finance the acquisition of Twinsburg, Ohio-based pharmacy benefit management company Envision Pharmaceutical Services. If the acquisition is not completed by Sept. 24, 2015, proceeds may be used to refinance certain debt, including the company’s tranche 1 and tranche 2 term loans and the 9¼% notes or the 8% notes.

Issuer:	Rite Aid Corp.
Amount:	$1.8 billion
Maturity:	April 1, 2023
Securities:	Senior notes
Bookrunners:	Citigroup Global Markets Inc., BofA Merrill Lynch, Wells Fargo Securities LLC, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co.
Coupon:	6 1/8%
Price:	Par
Yield:	6 1/8%
Spread:	434 bps
First call:	April 1, 2018 at 104.594
Equity clawback:	35% at 106.125 until April 1, 2018
Investor put:	101% upon change of control
Trade date:	March 19
Settlement date:	April 2
Ratings:	Moody's: B3
	Standard & Poor's: CCC+
Distribution:	Rule 144A and Regulation S with registration rights
Price talk:	6¼% area
Marketing:	Roadshow

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