Rite Aid 2012 Annual Report Download - page 93

RITE AID CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Years Ended March 3, 2012, February 26, 2011 and February 27, 2010
(In thousands, except per share amounts)
9. Indebtedness and Credit Agreement (Continued)
$404,844 aggregate principal amount of the outstanding 8.625% notes were tendered and repurchased
by the Company. In February 2012, the Company called for the redemption of the remaining 8.625%
notes. The Company satisfied and discharged the remaining 8.625% notes on March 14, 2012 for
$55,644, which included the call premium and interest through the call date. The refinancing resulted in
a loss for the period of $16,066.
During August 2011, the Company repurchased $41,000 of its 8.625% senior notes due March
2015, $5,000 of its 9.375% senior notes due December 2015 and $4,496 of its 6.875% senior debentures
due August 2013. These repurchases resulted in a gain for the period of $4,924.
On March 1, 2011, the Company was notified by the NYSE that, as of March 1, 2011, it had
regained compliance with the NYSE minimum share price listing requirement. The Company is now in
compliance with all NYSE listing rules, and has actively been taking steps to maintain its listing and
expects its efforts to maintain its NYSE listing will be successful. However, there can be no assurance
that the Company will maintain compliance with the NYSE minimum share price rule or other
continued listing requirements. In the event of a delisting, all holders of its $64,188 of outstanding
8.5% Convertible Notes due May 2015 (‘‘Convertible Notes’’) would be entitled to require the
Company to repurchase its Convertible Notes. The Company’s senior secured credit facility permits the
Company to make such a repurchase of the Convertible Notes; provided that, before and after such
transaction, no default or event of default shall have occurred and be continuing under the senior
secured credit facility and the Company has at least $100,000 of availability under its revolving credit
facility. The Company’s ability to pay cash to holders of the Convertible Notes may be limited by its
financial resources at the time of such repurchase. The Company cannot assure you that sufficient
financing will be available on terms acceptable to it if necessary to make any required repurchase of
the Convertible Notes.
2011 Transactions
In August 2010, the Company issued $650,000 of 8.00% senior secured notes due August 15, 2020.
These notes are unsecured, unsubordinated obligations of Rite Aid Corporation and rank equally in
right of payment with all other unsubordinated indebtedness. The Company’s obligations under these
notes are guaranteed, subject to certain limitations, by the same subsidiaries that guarantee the
obligations under the senior secured credit facility and the 9.75% senior secured notes due 2016. These
guarantees are shared, on a senior basis, with debt outstanding under the senior secured credit facility
and the 9.75% senior secured notes due 2016. The indenture that governs the 8.00% notes contains
covenant provisions that, among other things, allow the holders of the notes to participate along with
the term loan holders and holders of the 9.75% senior secured notes due 2016 in the mandatory
prepayments resulting from the proceeds of certain asset dispositions (at the option of the noteholder)
and include limitations on the Company’s ability to pay dividends, make investments or other restricted
payments, incur debt, grant liens, sell assets and enter into sale-leaseback transactions.
In July 2010, the Company repurchased $93,812 of its $158,000 outstanding 8.5% convertible notes.
The Company’s remaining 8.5% convertible notes require that the Company maintains a listing on the
NYSE or certain other exchanges. In the event of a NYSE delisting, holders of these notes could
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