Rite Aid Announces Early Results of Exchange Offer for Up to $600 Million Principal Amount of its Senior Notes Due 2023
January 21 2020 - 8:30AM
Business Wire
Rite Aid Corporation (NYSE: RAD) (“Rite Aid” or the “Company”)
today announced the early results of its previously announced offer
to exchange (the “Exchange Offer”) up to $600 million aggregate
principal amount (the “Maximum Amount”) of its outstanding 6.125%
Senior Notes due 2023 (the “Old Notes”) for newly issued 7.500%
Senior Secured Notes due 2025 (the “New Notes”), upon the terms and
subject to the conditions set forth in the offering memorandum
dated January 6, 2020 (the “Offering Memorandum”). The purpose of
the Exchange Offer is to improve the Company’s maturity profile by
extending the maturity date of a portion of the Old Notes from
April 2023 to July 2025.
As of 5:00 p.m., New York City time, on January 17, 2020 (such
date and time, the “Early Deadline”), $1,633,938,000 million
aggregate principal amount of the Old Notes, representing
approximately 93.18% of the outstanding Old Notes, were validly
tendered (and not validly withdrawn) pursuant to the Exchange
Offer. Rite Aid expects to accept for purchase the Maximum Amount
of validly tendered (and not validly withdrawn) Old Notes (the
“Purchased Notes”). Because the aggregate principal amount of Old
Notes validly tendered (and not validly withdrawn) at or prior to
the Early Deadline exceeded the Maximum Amount, Old Notes validly
tendered (and not validly withdrawn) at or prior to the Early
Deadline will be accepted on a pro rata basis up to the Maximum
Amount, subject to a proration factor of approximately 36.74%, and
the balance of Old Notes not accepted for exchange will be returned
to holders. No Old Notes tendered in the Exchange Offer after the
Early Deadline will be accepted for purchase.
Holders of the Purchased Notes will receive the Total Exchange
Consideration of $1,000 principal amount of New Notes per $1,000
principal amount of Old Notes accepted for purchase, which amount
includes the Early Tender Payment of $50 principal amount of New
Notes per $1,000 principal amount of Old Notes. Holders of the
Purchased Notes will also receive payment of accrued and unpaid
interest in cash to, but not including, the settlement date for the
Exchange Offer, which is expected to be February 5, 2020.
The Exchange Offer will expire at 11:59 p.m., New York City
time, on February 3, 2020. The Company reserves the right to amend,
extend or terminate the Exchange Offer at any time, subject to
applicable law. The Exchange Offer is subject to certain customary
conditions described in the Offering Memorandum.
The Exchange Offer and the issuance of the New Notes have not
been and will not be registered with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the
“Securities Act”), or any other applicable securities laws, and,
unless so registered, the New Notes may not be offered, sold,
pledged or otherwise transferred within the United States or to or
for the account of any U.S. person, except pursuant to an exemption
from the registration requirements thereof. Accordingly, the New
Notes are being offered and will be issued only to (i) “qualified
institutional buyers” (as defined in Rule 144A under the Securities
Act (“Rule 144A”)) and (ii) non-“U.S. persons” who are outside the
United States in compliance with Regulation S under the Securities
Act (“Regulation S”). Non U.S.-persons may also be subject to
additional eligibility criteria.
Available Documents and Other Details
Documents relating to the Exchange Offer will only be
distributed to holders of the Old Notes who complete and return an
eligibility form confirming that they are either a “qualified
institutional buyer” under Rule 144A or not a “U.S. person” under
Regulation S for purposes of applicable securities laws. Holders of
Old Notes who desire to complete an eligibility form should either
visit https://gbsc-usa.com/eligibility/riteaid or request
instructions by sending an e-mail to contact@gbsc-usa.com or by
calling Global Bondholder Services Corporation, the information and
exchange agent for the Exchange Offer, at (toll-free) (866)
470-3900 or (banks and brokers) (212) 430-3774. The eligibility
form is also available electronically at:
http://gbsc-usa.com/eligibility/riteaid.
The complete terms and conditions of the Exchange Offer are set
forth in the Offering Memorandum. This press release is for
informational purposes only and is neither an offer to purchase nor
a solicitation of an offer to sell the New Notes or any other
securities. The Exchange Offer is only being made pursuant to the
Offering Memorandum. The Exchange Offer is not being made to
holders of Old Notes in any jurisdiction in which the making or
acceptance thereof would not be in compliance with the securities,
blue sky or other laws of such jurisdiction. The New Notes have not
been approved or disapproved by any regulatory authority, nor has
any such authority passed upon the accuracy or adequacy of the
Offering Memorandum.
About Rite Aid Corporation
Rite Aid Corporation is on the front lines of delivering health
care services and retail products to over 1.6 million Americans
daily. Our pharmacists are uniquely positioned to engage with
customers and improve their health outcomes. We provide an array of
whole being health products and services for the entire family
through over 2,400 retail pharmacy locations across 18 states.
Through EnvisionRxOptions, we also deliver pharmacy benefit
management to approximately 1,900 clients and 3.4 million
members.
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.
Such statements include, but are not limited to, statements
regarding Rite Aid’s competitive position and ability to realize
its growth initiatives and operating efficiencies; and any
assumptions underlying any of the foregoing. 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 ability to complete the
transaction described herein, and any resulting charges or impact
on our financial results; 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, industry, market, competitive, regulatory and
political conditions; our ability to improve the operating
performance of our stores in accordance with our long term
strategy; the impact of private and public third-party payers
continued reduction in prescription drug reimbursements rates and
their efforts to limit access to payor networks; our ability to
manage expenses and our investments in working capital; outcomes of
legal and regulatory matters; changes in legislation or
regulations, including healthcare reform; our ability to achieve
the benefits of our efforts to reduce the costs of our generic and
other drugs; the inability to complete the sale of the remaining
Rite Aid distribution center and related assets to Walgreens Boots
Alliance, Inc. due to failure to satisfy the minimal remaining
conditions applicable only to the distribution center being
transferred at such distribution center closing; our ability to
successfully execute and achieve benefits from our recent change in
senior leadership; the potential for operational disruptions due
to, among other things, concerns of management, employees, current
and potential customers, other third parties with whom we do
business and shareholders; the success of any changes to our
business strategy that may be implemented under our new chief
executive officer and other management; our ability to achieve cost
savings through the organizational restructurings within the
anticipated timeframe, if at all; possible changes in the size and
components of the expected costs and charges associated with the
organizational restructuring plan; and the outlook for and future
growth of the Company.
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version on businesswire.com: https://www.businesswire.com/news/home/20200121005596/en/
INVESTORS: Byron Purcell (717) 975-5809
MEDIA: Christopher Savarese (717) 975-5718
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