Rite Aid begins tender, consent bid for $405 million of 9 3/8% notes

By Susanna Moon

Chicago, May 3 - Rite Aid Corp. said it began a cash tender offer for its $405 million outstanding principal amount of 9 3/8% senior notes due 2015.

The company also is soliciting consents to amend the notes to eliminate or modify restrictive covenants and events of default.

Rite Aid plans to call any notes that remain outstanding after the early settlement date, according to an 8-K filing with the Securities and Exchange Commission.

The total purchase price will be $1,028.75 per $1,000.00 principal amount, including a consent payment of $30.00 for notes tendered by the early deadline at midnight ET on May 14.

Holders also will receive accrued interest to but excluding the settlement date.

The company said it may settle early tendered notes before the offer ends. The final settlement date is expected to occur on the first business day after the offer expires.

The tender offer will end at midnight ET on May 31.

Holders who tender their notes after the early deadline will receive only the base payment of $998.75 per $1,000 of notes.

The offer is conditioned on Rite Aid completing one or more financing transactions with enough proceeds to fund the purchase.

Global Bondholder Services Corp. (866 804-2200 or banks and brokers 212 430-3774) is the information agent. Citigroup (800 558-3745 or collect 212 723-6106) is the dealer manager.

Rite Aid is a Camp Hill, Pa.-based chain of drugstores.

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