Rite Aid Subsidiary Sells Medicare Receivable to Bank of America Unit

By Chris Wack

Rite Aid Corp. on Friday said its wholly-owned Elixir Insurance Co. indirect subsidiary is selling its Medicare receivable to Part D Receivable Trust 2020-1, a Delaware statutory trust beneficially owned, directly or indirectly, by Bank of America N.A.

Under the terms of the agreement, the trust bought all of Elixir's right, title and interest of its 2022 Medicare Part D final reconciliation payment.

The payment is anticipated to be paid by the Centers for Medicare and Medicaid Services, an agency in the U.S. Department of Health and Human Services on or about Nov. 1, 2023. As of June 30, 2022, the book value of the receivable was $195.5 million.

Rite Aid said Elixir realized net cash proceeds of $167 million, which it intends to use to repay borrowings under its revolving credit facility. The company expects a non-operating loss of $15 million that it recognized on the sale of the receivable, which is equivalent to 7.6% of the book value of the receivable.

Write to Chris Wack at chris.wack@wsj.com

(END) Dow Jones Newswires

October 14, 2022 06:52 ET (10:52 GMT)

Rite Aid (NYSE:RAD)
Historical Stock Chart
From Mar 2024 to Apr 2024