Rite Aid 2015 Annual Report Download - page 95

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RITE AID CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Years Ended February 28, 2015, March 1, 2014 and March 2, 2013
(In thousands, except per share amounts)
13. Indebtedness and Credit Agreement (Continued)
Senior Secured Credit Facility). Subject to the limitations described in clauses (a) and (b) of the
immediately preceding sentence, the Amended and Restated Senior Secured Credit Facility additionally
allows the Company to issue or incur an unlimited amount of unsecured debt and disqualified
preferred stock so long as a Financial Covenant Effectiveness Period (as defined in the Amended and
Restated Senior Secured Credit Facility) is not in effect; provided, however, that certain of the
Company’s other outstanding indebtedness limits the amount of unsecured debt that can be incurred if
certain interest coverage levels are not met at the time of incurrence or other exemptions are not
available. The Amended and Restated Senior Secured Credit Facility also contains certain restrictions
on the amount of secured first priority debt the Company is able to incur. The Amended and Restated
Senior Secured Credit Facility also allows for the voluntary repurchase of any debt or the mandatory
repurchase of the Company’s 8.5% convertible notes due 2015 or other convertible debt, so long as the
Amended and Restated Senior Secured Credit Facility is not in default and the Company maintains
availability under its revolving credit facility of more than (i) prior to the repayment of our 8.00%
Notes, $300,000 and (ii) on and after the repayment of the Company’s 8.00% Notes, $365,000.
As of January 13, 2015, the Amended and Restated Senior Secured Credit Facility has a financial
covenant that requires the Company to maintain a minimum fixed charge coverage ratio of 1.00 to 1.00
(a) on any date on which availability under the revolving credit facility is less than (i) in the case of
dates prior to the repayment of our 8.00% Notes, $175,000 and (ii) in the case of dates on and after
the repayment of the Company’s 8.00% Notes, $200,000 or (b) on the third consecutive business day on
which availability under the revolving credit facility is less than (i) in the case of dates prior to the
repayment of the Company’s 8.00% Notes, $225,000 and (ii) in the case of dates on or after the
repayment of the Company’s 8.00% Notes, $250,000 and, in each case, ending on and excluding the
first day thereafter, if any, which is the 30th consecutive calendar day on which availability under the
revolving credit facility is equal to or greater than (i) in the case of dates prior to the repayment of the
Company’s 8.00% Notes, $225,000 and (ii) in the case of dates on or after the repayment of the
Company’s 8.00% Notes, $250,000. As of February 28, 2015, the availability was at a level that did not
did not trigger this covenant. The Amended and Restated Senior Secured Credit Facility also contains
covenants which place restrictions on the incurrence of debt, the payments of dividends, sale of assets,
mergers and acquisitions and the granting of liens.
The Amended and Restated Senior Secured Credit Facility also provides for customary events of
default.
The Company also has two second priority secured term loan facilities. The first includes a
$470,000 second priority secured term loan (the ‘‘Tranche 1 Term Loan’’). The Tranche 1 Term Loan
matures on August 21, 2020 and currently bears interest at a rate per annum equal to LIBOR plus
4.75% with a LIBOR floor of 1.00%, if the Company chooses to make LIBOR borrowings, or at
Citibank’s base rate plus 3.75%. The second includes a $500,000 second priority secured term loan (the
‘‘Tranche 2 Term Loan’’). The Tranche 2 Term Loan matures on June 21, 2021 and currently bears
interest at a rate per annum equal to LIBOR plus 3.875% with a LIBOR floor of 1.00%, if the
Company chooses to make LIBOR borrowings, or at Citibank’s base rate plus 2.875%.
Substantially all of Rite Aid Corporation’s 100 percent owned subsidiaries guarantee the
obligations under the Amended and Restated Senior Secured Credit Facility, second priority secured
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