Rite Aid extends tender offer for 8 1/8%, 9¼%, 7½% notes

By Angela McDaniels

Tacoma, Wash., July 1 - Rite Aid Corp. said it extended the tender offer for its 8 1/8% senior secured notes due 2010, 9¼% senior notes due 2013 and 7½% senior secured notes due 2015 to 5 p.m. ET on July 8 from midnight ET on July 1.

Holders had tendered $344.34 million of the 8 1/8% notes, $143.14 million of the 9¼% notes and $199.5 million of the 7½% notes as of 5 p.m. ET on June 30, according to a company news release.

The tender offer and a consent solicitation for the notes began on June 4. The consent deadline was 5 p.m. ET on June 17.

As of the consent deadline, the company had received tenders and consents for 95.58% of the 8 1/8% notes, 95.23% of the 9¼% notes and 99.74% of the 9¼% notes.

The consents allowed Rite Aid and some subsidiaries to enter into supplemental indentures containing amendments that will eliminate or modify substantially all the restrictive covenants, some events of default and other provisions in the note indentures.

The amendments will also release the subsidiary guarantees and release all the collateral securing the obligations of the subsidiary guarantors under the 8 1/8% notes and 7½% notes.

For each $1,000 principal amount of notes, Rite Aid said it will pay $1,024.06 for the 8 1/8% notes, $1,000 for the 9¼% notes and $1,095.80 for the 7½% notes. Holders will also receive accrued interest.

The payouts each include a $20.00 consent payment for notes tendered by the consent deadline.

The payouts for the 8 1/8% notes and 9¼% notes were announced when the company began the tender offer. Rite Aid calculated the payout for the 7½% notes on June 18 using a fixed spread of 75 basis points over the yield to maturity of the 3 5/8% Treasury due Jan. 15, 2010.

The company will use proceeds from its $470 million offering of 10 3/8% senior secured notes due 2016, borrowings under its revolving credit facility and borrowings under its new $350 million senior secured term loan to fund the tender offer.

The new notes offering, term loan and tender offer are all expected to settle on or about July 9, according to the release.

Global Bondholder Services Corp. (866 488-1500 or 212 430-3774) is the depositary and information agent, and Citi (800 558-3745 or 212 723-6106) is the dealer manager.

Rite Aid is a drugstore chain based in Camp Hill, Pa.

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