Rite Aid gets tenders for more than 95% of 8 1/8%, 9¼%, 7½% notes

By Angela McDaniels

Tacoma, Wash., July 9 - Rite Aid Corp. said it received tenders and consents for 96.9% of its 8 1/8% senior secured notes due 2010, for 95.9% of its 9¼% senior notes due 2013 and for 99.7% of its 7½% senior secured notes due 2015 during a tender offer that expired at midnight ET on July 1.

Specifically, holders tendered $348.9 million of the 8 1/8% notes, $144 million of the 9¼% notes $199.6 million of the 7½% notes, according to a company news release.

All the tendered notes were accepted for payment, and the company said it will redeem the 7½% notes that remain outstanding.

The consents allowed Rite Aid to amend the note indentures to eliminate or modify substantially all the restrictive covenants, some events of default and other provisions, to release the subsidiary guarantees and to 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, holders will receive $1,024.06 for the 8 1/8% notes, $1,000 for the 9¼% notes and $1,095.80 for the 7½% notes plus accrued interest.

The payouts include a $20.00 consent payment for those who tendered by the consent deadline, which was 5 p.m. ET on June 17.

The payout for the 7½% notes was determined on June 18 using a fixed spread of 75 basis points over the yield to maturity of the 3.625% Treasury due Jan. 15, 2010.

The offer was conditioned upon the receipt of debt financing sufficient to pay the total consideration and related fees and expenses.

On Wednesday, Rite Aid said it used proceeds from a new $350 million senior secured term loan due 2014 and $470 million of new 10 3/8% senior secured notes due 2016 to fund the tender offer.

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

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

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