Rite Aid to Offer Senior Notes to Refinance Accounts Receivables

Rite Aid Corp. has announced its intention to offer $250 million aggregate principal amount of senior secured notes due 2019.

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.

In a release, the Company noted that the notes offering is part of a comprehensive plan to refinance Rite Aid's 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.

Also included in the refinancing 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 also intends to enter into an amendment to its senior secured credit facility which will increase the maximum borrowing capacity under Rite Aid's existing senior secured revolving credit facility from $1.0 billion to $1.175 billion. Rite Aid intends to use the net proceeds from the offering of the notes, together with the proceeds from the increased term loan and borrowings under the revolving credit facility, to repay and cancel Rite Aid's accounts receivable securitization facilities and to fund related fees and expenses. Upon successful completion of the comprehensive plan, Rite Aid will have refinanced all of its September 2010 debt maturities.

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Related terms: debt, health, securitization