Tender Offers reduce outstanding debt and
interest expense while maintaining strong liquidity
Rite Aid Corporation (NYSE: RAD) (“Rite Aid” or the “Company”)
announced today the early tender results of its previously
announced series of tender offers (the “Tender Offers”) to purchase
for cash certain of its outstanding series of senior notes listed
in the table below (collectively, the “Notes”) for an aggregate
purchase price, excluding accrued and unpaid interest, of up to
$150,000,000 (the “Maximum Aggregate Cap”). The Tender Offers are
being made pursuant to the terms and conditions set forth in the
Offer to Purchase, dated June 13, 2022 (the “Offer to Purchase”).
The Company refers investors to the Offer to Purchase for the
complete terms and conditions of the Tender Offers.
As of 5:00 p.m., New York City time, on June 27, 2022 (such date
and time, the “Early Tender Date”), according to information
provided to Global Bondholder Services Corporation, the tender and
information agent for the Tender Offers, the aggregate principal
amount of each series of Notes listed in the table below has been
validly tendered and not validly withdrawn in each Tender Offer.
Withdrawal rights for the Notes expired at 5:00 p.m., New York City
time, on the Early Tender Date.
Title of Security
CUSIP Number
Principal Amount
Outstanding
Maximum SubCap(1)
Acceptance Priority
Level(2)
Principal Amount Tendered at
Early Tender Date
Percentage of Outstanding
Notes Tendered
Total
Consideration(3)(4)
Aggregate Principal Amount
Accepted for Purchase
2025 Tender Offer
7.50% Senior Secured Notes due
2025
767754CK8/ U76659AX6
$600,000,000
$100,000,000
1
$458,603,000
76.43%
$870.00
$114,942,000
2028 Tender Offer
6.875% Debentures due 2028
767754AR5/ U76659AF5
$29,001,000
N/A
2
$26,955,000
92.95%
$570.00
$26,955,000
2027 Tender Offer
7.70% Notes due 2027
767754AJ3
$237,386,000
N/A
3
$58,708,000
24.73%
$670.00
$51,695,000
2026 Tender Offer
8.00% Senior Secured Notes due
2026
767754CL6/ U76659AY4
$849,918,000
N/A
4
$558,784,000
65.75%
$850.00
$0
(1)
The maximum subcap applicable to
the 7.50% Senior Secured Notes due 2025 (the “2025 Notes”) of
$100,000,000 (the “2025 Maximum SubCap”) represents the maximum
aggregate purchase price payable, excluding accrued and unpaid
interest on the 2025 Notes, in respect of the 2025 Notes being
purchased in the 2025 Tender Offer.
(2)
Subject to the Maximum Aggregate
Cap and proration, the principal amount of Notes being purchased in
each Tender Offer has been determined in accordance with the
applicable acceptance priority level (in numerical priority order)
specified in this column provided that the Company will not accept
2025 Notes in an amount that exceeds the 2025 Maximum SubCap.
(3)
Does not include accrued and
unpaid interest on the Notes, which will also be payable as
provided herein.
(4)
Includes the Early Tender Premium
(as defined below).
All conditions were satisfied or waived by the Company at the
Early Tender Date. The Company has elected to exercise its right to
make payment for Notes that were validly tendered at or prior to
the Early Tender Date and that are accepted for purchase on June
29, 2022 (the “Early Settlement Date”). The Company intends to fund
the purchase of validly tendered and accepted Notes on the Early
Settlement Date, in part, with available cash, including borrowings
under the Company’s revolving credit facility.
As the aggregate purchase price of Notes validly tendered and
not validly withdrawn at or prior to the Early Tender Date exceeded
the Maximum Aggregate Cap, no Notes tendered after the Early Tender
Date will be accepted for purchase. As described in the Offer to
Purchase, Notes validly tendered and not validly withdrawn on or
prior to the Early Tender Date will be accepted based on the
acceptance priority levels noted in the table above. As the
aggregate principal amount of the Notes validly tendered and not
validly withdrawn exceeds the Maximum Aggregate Cap, the Notes will
be accepted on a pro rata basis as set forth in the Offer to
Purchase, subject to a proration factor of approximately 25.1% in
case of the 2025 Notes and approximately 88.1% in case of the 7.70%
Notes due 2027. All of the 6.875% Debentures due 2028 will be
accepted. None of the 8.00% Senior Secured Notes due 2026 will be
accepted. Notes tendered and not purchased on the Early Settlement
Date will be returned to holders promptly after the Early
Settlement Date. The consideration to be paid for the Notes validly
tendered and not validly withdrawn per $1,000 principal amount of
such Notes validly tendered and accepted for purchase pursuant to
the applicable Tender Offer is the amount set forth in the table
above under the heading “Total Consideration.” The amounts set
forth in the table above under “Total Consideration” include an
early tender premium of $50 per $1,000 principal amount of Notes
accepted for purchase (the “Early Tender Premium”). Each holder who
validly tendered and did not validly withdraw its Notes at or prior
to the Early Tender Date and whose Notes are accepted for purchase
will be entitled to receive the applicable “Total Consideration”
set forth in the table above under the heading “Total
Consideration,” which includes the Early Tender Premium. All
holders of Notes accepted for purchase will also receive accrued
interest from, and including, the most recent applicable interest
payment date preceding the Early Settlement Date to, but not
including, the Early Settlement Date, if and when such Notes are
accepted for payment.
Information Relating to the Tender Offers
The complete terms and conditions of the Tender Offers are set
forth in the Offer to Purchase. Investors with questions regarding
the terms and conditions of the Tender Offers may contact UBS
Securities LLC at (888) 719-4210 (toll-free) or (203) 719-4210
(collect).
Global Bondholder Services Corporation is the tender and
information agent for the Tender Offers. Any questions regarding
procedures for tendering Notes or request for copies of the Offer
to Purchase should be directed to Global Bondholder Services
Corporation by any of the following means: by telephone at (855)
654-2014 (toll-free) or (212) 430-3774 (collect); by email at
contact@gbsc-usa.com; or by internet at the following web address:
https://www.gbsc-usa.com/riteaid/.
This press release does not constitute an offer to sell or
purchase, or a solicitation of an offer to sell or purchase, or the
solicitation of tenders with respect to, the Notes. No offer,
solicitation, purchase or sale will be made in any jurisdiction in
which such an offer, solicitation or sale would be unlawful. The
Tender Offers are being made solely pursuant to the Offer to
Purchase made available to holders of the Notes. None of the
Company or its affiliates, their respective boards of directors,
the dealer manager, the tender and information agent or the trustee
with respect to any series of Notes is making any recommendation as
to whether or not holders should tender or refrain from tendering
all or any portion of their Notes in response to the tender offers.
Holders are urged to evaluate carefully all information in the
Offer to Purchase, consult their own investment and tax advisors
and make their own decisions whether to tender Notes in the Tender
Offers, and, if so, the principal amount of Notes to tender.
About Rite Aid Corporation
As the trusted, everyday care connector, Rite Aid drives lower
health care costs through better coordination, stronger engagement,
and personalized services that help you achieve whole health for
life. Rite Aid provides an array of whole being health products and
services for the entire family through more than 2,300 retail
pharmacy locations across 17 states. Through Elixir, Rite Aid
provides pharmacy benefits and services to millions of members
nationwide.
Forward Looking Statements
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: risks related to the prolonged
impact of the COVID-19 global pandemic and the emerging new
variants, including the government responses thereto; the impact of
COVID-19 on our workforce, operations, stores, expenses, and supply
chain, and the operations or behaviors of our customers, suppliers
and business partners; our ability to successfully implement our
store closure program and other strategies; the impact of our high
level of indebtedness, the ability to refinance such indebtedness
on acceptable terms and our ability to satisfy our obligations and
the other covenants contained in our debt agreements; outcome of
pending or new litigation, including related to Opioids, “usual and
customary” pricing or other matters; our ability to monetize the
Centers of Medicare and Medicaid Services receivable created in our
Part D business; general competitive, economic, industry, market,
political (including healthcare reform) and regulatory conditions
(including changes to laws or regulations relating to labor or
wages), as well as other factors that impact the markets in which
the Company operates; the impact of private and public third-party
payers continued reduction in prescription drug reimbursements and
efforts to encourage mail order; our ability to manage expenses and
our investments in working capital; our ability to achieve the
benefits of our efforts to reduce the costs of our generic and
other drugs; our ability to achieve cost savings and other benefits
of our restructuring efforts within our anticipated timeframe, if
at all; the outcome of our continuing efforts to monitor and comply
with applicable laws, regulations, policies and procedures; and our
ability to partner and have relationships with health plans and
health systems.
These and other risks, assumptions and uncertainties are more
fully described in Item 1A (Risk Factors) of our most recent Annual
Report on Form 10-K and in other documents that the Company files
or furnishes with the Securities and Exchange Commission, which you
are encouraged to read. To the extent that COVID-19 adversely
affects our business and financial results, it may also have the
effect of heightening many of such risk factors.
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
rely on these forward-looking statements, which speak only as of
the date they are made.
The degree to which COVID-19 may adversely affect Rite Aid’s
results and operations will depend on numerous evolving factors and
future developments, which are highly uncertain, including, but not
limited to, federal, state and local governmental policies and
initiatives designed to reduce the transmission of COVID-19 and
emerging new variants and how quickly and to what extent normal
economic and operating conditions can resume. As a result, the
impact on Rite Aid’s financial and operating results cannot be
reasonably estimated with specificity at this time, but the impact
could be material. Rite Aid expressly disclaims any current
intention, and assumes no duty, 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.
All references to “Company” and “Rite Aid” as used throughout
this release refer to Rite Aid Corporation and its affiliates. No
report of any rating agency is incorporated by reference
herein.
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version on businesswire.com: https://www.businesswire.com/news/home/20220627005813/en/
INVESTORS: Byron Purcell (717) 975-3710 investor@riteaid.com
MEDIA: Terri Hickey (717) 975-5718 press@riteaid.com
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