Rite Aid Prices Senior Secured Notes

Rite Aid Corp. has announced the terms of an offering of $270 million aggregate principal amount ($20 million more than previously announced) of 10.250 percent senior secured notes due 2019 (with a yield to maturity of 10.375 percent, based on an offering price of 99.242 percent per note).

The notes will be unsecured, unsubordinated obligations of Rite Aid Corp. and will be guaranteed by substantially all of Rite Aid's subsidiaries. The guarantees will be secured on a second lien basis.

The transaction is expected to close on October 26, subject to customary closing conditions.

In a release, the Company noted that the offering of the notes is part of its previously announced plan to refinance its existing first lien accounts receivable securitization facility and second lien accounts receivable securitization facility due September 2010. As of October 16, there was $475 million outstanding under the securitization facilities. Rite Aid has also received commitments to increase the borrowing capacity under Rite Aid's existing senior secured revolving credit facility from $1.0 billion to $1.175 billion. Also included in the refinancing plan is an increase in borrowing under Rite Aid's existing $525 million senior secured term loan due June 2015 by $125 million to $650 million. Rite Aid intends to use the net proceeds from the offering of the notes, together with borrowings under the revolving credit facility and the proceeds from the increased term loan, to repay and cancel Rite Aid's accounts receivable securitization facilities and to fund related fees and expenses. In the course of syndicating the increased revolver capacity and term loan, we may increase the size of one facility with a corresponding reduction in size of the other. Upon successful completion of the comprehensive plan, Rite Aid will have refinanced all of its September 2010 debt maturities.

The notes offering is subject to customary closing conditions and conditioned upon Rite Aid's substantially concurrent consummation of the other components of the refinancing transactions in substantially the form described above.

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