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Rite Aid (RAD) Moves Higher After Announcing Debt Refinancing

February 1, 2013 8:42 AM EST Send to a Friend
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Rite Aid Corporation (NYSE: RAD) stock moved higher after it announced that it has commenced a series of debt refinancing transactions that would extend the maturity of a portion of Rite Aid's outstanding indebtedness and lower interest expense. The refinancing transactions are expected to include:

*the amendment and restatement of Rite Aid’s existing revolving credit facility;

*the refinancing of Rite Aid’s $1.039 billion Tranche 2 Term Loan due 2014 with the proceeds of a new term loan, together with borrowings under the amended revolving credit facility; and

*cash tender offers for Rite Aid’s $410.0 million aggregate principal amount of 9.750% Senior Secured Notes due 2016; $470.0 million aggregate principal amount of 10.375% Senior Secured Notes due 2016; and $180.3 million aggregate principal amount of 6.875% Senior Debentures due 2013, with the proceeds from new first and/or second lien term loans, together with borrowings under the amended revolving credit facility and available cash.

Rite Aid has not yet determined the amount of the amended revolving credit facility or new term loans. Rite Aid currently has signed commitments for a $1.5 billion revolving credit facility, which are subject to customary terms and conditions. Rite Aid’s results of operations and guidance will likely be impacted by fees, expenses and charges related to the refinancing transactions.

As part of the Tender Offers, Rite Aid is soliciting consents for amendments that would eliminate or modify certain covenants, events of default and other provisions contained in the indentures governing the Notes. Holders who tender their Notes will be deemed to consent to all of the proposed amendments applicable to that series and holders may not deliver consents without tendering their Notes. The Tender Offers and Consent Solicitations are being made pursuant to separate Offers to Purchase and Consent Solicitation Statements, each dated Jan. 31, 2013, and related Consents and Letters of Transmittal, which more fully set forth the terms and conditions of the Tender Offers and Consent Solicitations.

The Tender Offers will expire at midnight, Eastern Time, on Feb. 28, 2013, unless extended or earlier terminated. Rite Aid may extend or terminate one or more of the Tender Offers without impacting the other Tender Offers. Under the terms of the Tender Offers, holders of the Notes who validly tender and do not withdraw their Notes prior to midnight, Eastern Time, on Feb. 13, 2013 (as such time and date may be extended) and whose Notes are accepted for purchase, will receive the applicable “Total Consideration,” which is equal to the applicable “Tender Offer Consideration” plus a consent payment of $30.00 per $1,000 principal amount of tendered Notes. Holders of Notes who validly tender their Notes after the Consent Payment Date but on or before the Expiration Date, and whose Notes are accepted for purchase, will receive only the applicable Tender Offer Consideration.




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