Rite Aid Corporation (NYSE: RAD) today 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:
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the amendment and restatement of Rite Aid’s existing revolving credit
facility;
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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
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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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9.750% Senior Secured Notes due 2016
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Title of Security
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CUSIP Number
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Principal Amount
Outstanding
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Tender Offer
Consideration (1)
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Consent
Payment (1)
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Total Consideration (1)(2) |
9.750% Senior Secured Notes due 2016
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767754BX1
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$410,000,000
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$1,045.00
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$30.00
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$1,075.00
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10.375% Senior Secured Notes due 2016
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Title of Security
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CUSIP Number
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Principal Amount
Outstanding
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Tender Offer
Consideration (1)
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Consent
Payment (1)
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Total Consideration (1)(2) |
10.375% Senior Secured Notes due 2016
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767754BV5
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$470,000,000
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$1,028.50
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$30.00
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$1,058.50
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6.875% Senior Debentures due 2013
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Title of Security
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CUSIP Number
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Principal Amount
Outstanding
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Tender Offer
Consideration (1)
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Consent
Payment (1)
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Total Consideration (1)(2) |
6.875% Senior Debentures due 2013
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767754AD6
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$180,277,000
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$998.75
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$30.00
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$1,028.75
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_________________
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(1) Per $1,000.00 principal amount of the applicable series of notes
validly tendered and accepted for purchase.
(2) Inclusive of Consent Payment.
Rite Aid reserves the right but is under no obligation, at any point
following the Consent Payment Deadline and before the Expiration Date,
to accept for purchase Notes of one or more of the series validly
tendered and not subsequently withdrawn at or prior to the Consent
Payment Deadline, subject to satisfaction or waiver of the conditions to
the Tender Offers. In addition to the Total Consideration or the Tender
Offer Consideration, holders whose Notes are accepted in the Tender
Offer will receive accrued and unpaid interest from and including the
most recent interest payment date, and up to, but excluding, the
applicable settlement date. Holders of 6.875% Debentures whose tenders
are settled prior to Feb. 15, 2013 will be deemed to have consented to
giving up any claim to the interest payment due on Feb. 15, 2013 that
they might otherwise have as a result of the related interest payment
record date of Feb. 1, 2013, and will receive only the accrued interest
described above.
Rite Aid intends to redeem any 9.750% Notes and 10.375% Notes not
tendered in the Tender Offers and Consent Solicitations. Rite Aid
intends to satisfy and discharge any 6.875% Debentures that remain
outstanding after the Tender Offer and Consent Solicitation. Holders of
6.875% Debentures that are satisfied and discharged will continue to
receive regular interest payments and repayment of their 6.875%
Debentures will be made at maturity on Aug. 15, 2013. In addition, on
Jan. 25, 2013, Rite Aid called for redemption, and will redeem on Feb.
25, 2013, all of its $6.0 million aggregate principal amount of
outstanding 9.25% Senior Notes due 2013.
The Tender Offers and Consent Solicitations are contingent upon the
satisfaction of certain conditions, including, with respect to the
9.750% Notes and the 10.375% Notes, the condition that Rite Aid has
completed one or more financing transactions resulting in net proceeds
to Rite Aid that are sufficient to pay the Total Consideration, plus the
applicable interest payment described above, in respect of all of the
9.750% Notes and the 10.375% Notes. If any of the conditions are not
satisfied or waived, Rite Aid is not obligated to accept for payment,
purchase or pay for, and may delay the acceptance for payment of, any
tendered Notes and may terminate one or more Tender Offers and Consent
Solicitations.
This press release does not constitute a notice of redemption under the
optional redemption provisions of the indenture governing any series of
the Notes, nor does it constitute an offer to sell, or a solicitation of
an offer to buy, any security. No offer, solicitation, or sale will be
made in any jurisdiction in which such an offer, solicitation, or sale
would be unlawful.
Requests for documents relating to each Tender Offer and Consent
Solicitation may be directed to Global Bondholder Services Corp., the
Information Agent, at (866) 804-2200 or (212) 430-3774 (banks and
brokers). Citigroup will act as Dealer Manager and Solicitation Agent
for each Tender Offer and Consent Solicitation. Questions regarding each
Tender Offer and Consent Solicitation may be directed to Citigroup at
(800) 558-3745 (toll free) or (212) 723-6106 (collect).
Rite Aid is one of the nation’s leading drugstore chains with 4,626
stores in 31 states and the District of Columbia and fiscal 2012 annual
revenues of $26.1 billion.
Statements in this release that are not historical are
forward-looking statements made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. Words such as
“anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,”
“intend,” “may,” “plan,” “predict,” “project,” “should,” and “will” and
variations of such words and similar expressions are intended to
identify such forward-looking statements. These forward-looking
statements are not guarantees of future performance and involve risks,
assumptions and uncertainties, including, but not limited to, our high
level of indebtedness and our ability to make interest and principal
payments on our debt and satisfy the other covenants contained in our
debt agreements, general economic, market and competitive conditions,
our ability to improve the operating performance of our stores in
accordance with our long term strategy, the continued efforts of private
and public third-party payers to reduce prescription drug reimbursements
and encourage mail order and limit access to payor networks, the ability
to realize anticipated results from capital expenditures and cost
reduction initiatives, outcomes of legal and regulatory matters and
changes in legislation or regulations, including healthcare reform.
These and other risks, assumptions and uncertainties are described in
Item 1A (Risk Factors) of our most recent Annual Report on Form 10-K and
in other documents that we file or furnish with the Securities and
Exchange Commission, which you are encouraged to read. Should one or
more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from
those indicated or anticipated by such forward-looking statements.
Accordingly, you are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date they are
made. Rite Aid expressly disclaims any current intention to update
publicly any forward-looking statement after the distribution of this
release, whether as a result of new information, future events, changes
in assumptions or otherwise.