Rite Aid 2015 Annual Report Download - page 41

redemption with borrowings under our revolving credit facility. We recorded a loss on debt retirement
of $18.5 million related to this transaction.
Financing for the Pending Acquisition
On April 2, 2015, we issued $1.8 billion aggregate principal amount of our 6.125% senior notes
due 2023 to finance the cash portion of our pending acquisition of EnvisionRx. Our obligations under
the notes are fully and unconditionally guaranteed, jointly and severally, on an unsubordinated basis, by
all of our subsidiaries that guarantee our obligations under our senior secured credit facility (the
‘‘Senior Credit Facility’’), the Tranche 1 Term Loan, the Tranche 2 Term Loan, and the 8.00% Notes,
the 9.25% Notes and our 6.75% senior notes due 2021 (the ‘‘6.75% Notes’’) (the ‘‘Rite Aid Subsidiary
Guarantors’’), and, upon completion of the acquisition, by EnvisionRx and certain of its domestic
subsidiaries other than Envision Insurance Company (the ‘‘EnvisionRx Subsidiary Guarantors’’ and,
together with the Rite Aid Subsidiary Guarantors, the ‘‘Subsidiary Guarantors’’). The guarantees will be
unsecured. The 6.125% senior notes are unsecured, unsubordinated obligations of Rite Aid
Corporation and will rank equally in right of payment with all of our other unsecured, unsubordinated
indebtedness. In the unlikely event that we do not complete the acquisition, we can redeem these notes
at a price of 101 or can use the proceeds to refinance other indebtedness.
2014 Transactions
In June 2013, $419.2 million aggregate principal amount of the outstanding 7.5% senior secured
notes due 2017 were tendered and repurchased by us. In July 2013, we redeemed the remaining 7.5%
notes for $85.2 million which included the call premium and interest to the redemption date. The
tender offer for, and redemption of, the 7.5% notes were funded using the proceeds from the
Tranche 2 Term Loan, borrowings under our revolving credit facility and available cash.
On July 2, 2013, we issued $810.0 million of our 6.75% senior notes due 2021. Our obligations
under the notes are fully and unconditionally guaranteed, jointly and severally, on an unsubordinated
basis, by all of our subsidiaries that guarantee our obligations under our senior secured credit facility,
our second priority secured term loan facilities and our outstanding 8.00% senior secured notes due
2020, 10.25% senior secured notes due 2019 and 9.25% senior notes due 2020. We used the net
proceeds of the 6.75% notes, borrowings under our revolving credit facility and available cash to
repurchase and repay all of our outstanding $810.0 million aggregate principal of 9.5% senior notes due
2017.
In July 2013, $739.6 million aggregate principal amount of the outstanding 9.5% notes were
tendered and repurchased by us. In August 2013, we redeemed the remaining 9.5% notes for
$73.4 million, which included call premium and interest to the redemption date.
In connection with these refinancing transactions, we recorded a loss on debt retirement, including
tender and call premium and interest, unamortized debt issue costs and unamortized discount of
$62.2 million during the second quarter of fiscal 2014.
On September 26, 2013, we agreed to exchange eight shares of 7% Series G Convertible Preferred
Stock (the ‘‘Series G preferred stock’’) and 1,876,013 shares of 6% Series H Convertible Preferred
Stock (the ‘‘Series H preferred stock’’, collectively the ‘‘Preferred Stock’’) of the Company (the
‘‘Exchange’’), held by Green Equity Investors III, L.P. (‘‘LGP’’) for 40,000,000 shares of our common
stock, par value $1.00 per share with a market value of $190.4 million at the $4.76 per share closing
price on the Settlement Date (as hereinafter defined), pursuant to an individually negotiated exchange
transaction. The Exchange settled on September 30, 2013 (the ‘‘Settlement Date’’). The Preferred
Stock, including additional shares representing earned but unpaid dividends as of the Settlement Date,
was redeemable by us for cash at 105% of the Preferred Stock’s $100 per share liquidation preference
or $199.9 million. We agreed to the Exchange as we were prohibited under several of our debt
instruments from using cash to effect the redemption of the Preferred Stock. Following the Settlement
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