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CAMP HILL, Pa. — Rite Aid Corp. has completed a plan to refinance debt maturing in September 2010.
Executives at the heavily leveraged drug chain say the transaction, which refinances first- and second-lien accounts receivable securitization facilities, eliminates refinancing and liquidity risk for the next two years. They note that as of October 23, $475 million was outstanding under the facilities.
The refinancing consists of an offering of $270 million of 10.25% senior secured notes due in 2019, commitments to raise the borrowing capacity under Rite Aid’s senior secured revolving credit facility from $1 billion to $1.175 billion, and an increase in borrowings under an existing $525 million senior secured term loan (due June 2015) by $125 million to $650 million.
Fitch Ratings affirmed its “stable” outlook for Rite Aid after the debt offering was announced. “The stable outlook reflects Rite Aid’s completion of 2010 refinancing activities; thus near-term liquidity concerns are alleviated,” Fitch stated.
“With the refinancings successfully completed, Fitch anticipates that management can turn its full focus on improving core operations, and that rating movements will largely depend on Rite Aid’s top line and profitability.”
