Rite Aid Announces Successful Amendment and Extension to Credit Agreement

Rhea-AI Summary

Rite Aid Corporation (NYSE: RAD) announced an amendment to its senior secured credit agreement, introducing a $2.8 billion asset-based revolving credit facility and a $350 million first-in, last-out senior secured term loan. These amended facilities extend debt maturity to August 2026, providing improved pricing for the term loan. The interest rates on the new facilities are lower than previous rates, signaling confidence from the financial community and supporting Rite Aid's strategic objectives under its RxEvolution strategy.

Positive

• Debt maturity extended to August 2026, improving financial stability.
• Lower interest rates on amended credit facilities compared to prior rates.
• Financial community support enhances liquidity and strategic objectives.

Negative

• None.

Rite Aid Corporation (NYSE: RAD) announced today that it has entered into an amendment to its senior secured credit agreement, which, after giving effect to the amendment, consists of a $2.8 billion senior secured asset-based revolving credit facility and a $350 million “first-in, last out” senior secured term loan facility. The new facilities extend the Company's debt maturity profile and provides improved pricing on the “first-in, last out” senior secured term loan. The new senior secured credit facilities have a scheduled maturity date in August 2026, subject to an earlier maturity if Rite Aid has not repaid or refinanced its existing secured notes prior to such date. The Company's amended revolving credit facility will bear interest at a rate of LIBOR plus 125 to 175 basis points (or an alternate base rate plus 25 to 75 basis points), depending on availability under the revolving facility. The Company's amended senior secured term loan facility will bear interest at a rate of LIBOR plus 275 basis points (or an alternate base rate plus 175 basis points), compared to a rate of LIBOR plus 300 basis (or an alternate base rate plus 200 basis points) points prior to the effectiveness of the amendment.

“For Rite Aid these amended credit facilities, with their extended maturity date to 2026, greater flexibility and enhanced pricing for the term loan, not only represent a significant vote of confidence from the financial community, but more importantly provide continued support for our immediate and long-term strategic objectives under our RxEvolution strategy,” said Matt Schroeder, Rite Aid’s chief financial officer.

BofA Securities, Inc., Wells Fargo Bank, National Association, Capital One, National Association, BMO Harris Bank N.A., Fifth Third Bank, MUFG Union Bank, N.A., PNC Capital Markets LLC, Truist Securities, Inc. and ING Capital LLC, acted as joint lead arrangers and joint bookrunners for the amended credit facilities. Bank of America, N.A. continues to act as administrative agent and collateral agent under the amended credit facilities.

About Rite Aid Corporation

Rite Aid Corporation is on the front lines of delivering healthcare services and retail products to Americans 365 days a year. 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 2,500 retail pharmacy locations across 17 states. Through Elixir, we provide pharmacy benefits and services to millions of members nationwide. For more information, www.riteaid.com.

Cautionary Statement Regarding 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. 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 we file or furnish with the Securities and Exchange Commission (the “SEC”), 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. 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210823005315/en/

FAQ

What are the details of Rite Aid's new credit facilities as of 2023?

Rite Aid's new credit facilities include a $2.8 billion revolving credit facility and a $350 million term loan with maturity extended to August 2026.

How do the interest rates on Rite Aid's amended credit facilities compare to previous rates?

The interest rates on the amended facilities are lower than the previous rates, enhancing financial flexibility.

What is the significance of the credit facilities for Rite Aid's business strategy?

These facilities provide essential liquidity and support Rite Aid's long-term strategic objectives under its RxEvolution strategy.

When is the maturity date for Rite Aid's amended senior secured credit facilities?

The maturity date for the amended facilities is set for August 2026.