Rite Aid 2016 Annual Report Download - page 51

$1,545.6 million, which consisted of revolver borrowing capacity of $1,530.7 million and invested cash of
$14.9 million.
Credit Facility
On January 13, 2015, we amended and restated our Amended and Restated Senior Secured Credit
Facility, which, among other things, increased borrowing capacity from $1.795 billion to $3.0 billion
(which further increased to $3.7 billion upon the redemption of our 8.00% Notes on August 15, 2015),
and extended the maturity to January 2020 from February 2018. We used borrowings under the
revolver to repay and retire all of the $1.144 billion outstanding under our Tranche 7 Senior Secured
Term Loan due 2020, along with associated fees and expenses. Borrowings under the revolver bear
interest at a rate per annum between (i) LIBOR plus 1.50% and LIBOR plus 2.00% with respect to
Eurodollar borrowings and (ii) the alternate base rate plus 0.50% and the alternate base rate plus
1.00% with respect to ABR borrowings, in each case, based upon the average revolver availability (as
defined in the Amended and Restated Senior Secured Credit Facility). We are required to pay fees
between 0.250% and 0.375% per annum on the daily unused amount of the revolver, depending on the
Average Revolver Availability (as defined in the Amended and Restated Senior Secured Credit
Facility). Amounts drawn under the revolver become due and payable on January 13, 2020.
On February 10, 2015, we amended the Amended and Restated Senior Secured Credit Facility to,
among other things, increase the flexibility of Rite Aid to incur and/or issue unsecured indebtedness,
including in connection with the acquisition of EnvisionRx, and made certain other modifications to the
covenants applicable to Rite Aid and its subsidiaries.
Our ability to borrow under the revolver is based upon a specified borrowing base consisting of
accounts receivable, inventory and prescription files. At February 27, 2016, we had $2,100.0 million of
borrowings outstanding under the revolver and had letters of credit outstanding against the revolver of
$69.3 million, which resulted in additional borrowing capacity of $1,530.7 million. If at any time the
total credit exposure outstanding under our Amended and Restated Senior Secured Credit Facility and
the principal amount of our other senior obligations exceeds the borrowing base, we will be required to
make certain other mandatory prepayments to eliminate such shortfall. Additionally, the Merger
Agreement limits our ability to incur additional indebtedness for borrowed money, and limits our
ability to borrow under the revolver to $3.0 billion.
The Amended and Restated Senior Secured Credit Facility restricts us and all of our subsidiaries
that guarantee our obligations under the Amended and Restated Senior Secured Credit Facility, second
priority secured term loan facilities, secured guaranteed notes and unsecured guaranteed notes (the
‘‘Subsidiary Guarantors’’) from accumulating cash on hand in excess of $200.0 million at any time when
revolving loans are outstanding (not including cash located in our store deposit accounts, cash
necessary to cover our current liabilities, cash proceeds of notes issued in connection with a proposed
business acquisition, including the proceeds from our April 2, 2015 issuance of $1.8 billion of our
6.125% Notes, issued to finance the cash portion of our acquisition of EnvisionRx, and certain other
exceptions) and from accumulating cash on hand with revolver borrowings in excess of $100.0 million
over three consecutive business days. The Amended and Restated Senior Secured Credit Facility also
states that if at any time (other than following the exercise of remedies or acceleration of any senior
obligations or second priority debt and receipt of a triggering notice by the senior collateral agent from
a representative of the senior obligations or the second priority debt) either (a) an event of default
exists under our Amended and Restated Senior Secured Credit Facility or (b) the sum of revolver
availability under our Amended and Restated Senior Secured Credit Facility and certain amounts held
on deposit with the senior collateral agent in a concentration account is less than $275.0 million for
three consecutive business days or less than or equal to $200.0 million on any day (a ‘‘cash sweep
period’’), the funds in our deposit accounts will be swept to a concentration account with the senior
collateral agent and will be applied first to repay outstanding revolving loans under the Amended and
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