Rite Aid Announces Closing of Exchange Offer for $600 Million of its Senior Notes Due 2023
February 05 2020 - 4:15PM
Business Wire
Rite Aid Corporation (NYSE: RAD) (“Rite Aid” or the “Company”)
today announced the settlement 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”). The purpose of the
Exchange Offer was 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 11:59 p.m., New York City time, on February 3, 2020 (the
“Expiration Date”), $1,633,938,000 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Old Notes, were validly tendered (and not validly withdrawn)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 accepted for purchase the
Maximum Amount of Old Notes (the “Purchased Notes”). Because the
aggregate principal amount of Old Notes validly tendered exceeded
the Maximum Amount, Old Notes validly tendered (and not validly
withdrawn) at or prior to the Early Deadline were accepted on a pro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 were returned to holders. No Old Notes tendered after
the Early Deadline were accepted for purchase.
Holders of the Purchased Notes received 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 also received payment of accrued and unpaid
interest in cash to, but not including, the date hereof.
The Exchange Offer and the issuance of the New Notes were not
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 were
offered and 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 have been subject to additional
eligibility criteria.
The complete terms and conditions of the Exchange Offer are set
forth in the offering memorandum dated January 6, 2020 (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 was only made pursuant to the
Offering Memorandum. The Exchange Offer was not 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 were not 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 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/20200205005742/en/
INVESTORS: Byron Purcell (717) 975-5809
MEDIA: Christopher Savarese (717) 975-5718
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