Rite Aid 2016 Annual Report Download - page 52

Restated Senior Secured Credit Facility, and then held as collateral for the senior obligations until such
cash sweep period is rescinded pursuant to the terms of our Amended and Restated Senior Secured
Credit Facility.
The Amended and Restated Senior Secured Credit Facility allows us to have outstanding, at any
time, up to $1.5 billion in secured second priority debt, split-priority term loan debt, unsecured debt
and disqualified preferred stock in addition to borrowings under the Amended and Restated Senior
Secured Credit Facility and existing indebtedness, provided that not in excess of $750.0 million of such
secured second priority debt, split-priority term loan debt, unsecured debt and disqualified preferred
stock shall mature or require scheduled payments of principal prior to 90 days after the latest of
(a) the fifth anniversary of the effectiveness of the Amended and Restated Senior Secured Credit
Facility and (b) the latest maturity date of any Term Loan or Other Revolving Loan (each as defined in
the Amended and Restated Senior Secured Credit Facility) (excluding bridge facilities allowing
extensions on customary terms to at least the date that is 90 days after such date and, with respect to
any escrow notes issued by Rite Aid, excluding any special mandatory redemption of the type described
in clause (iii) of the definition of ‘‘Escrow Notes’’ in the Amended and Restated 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 us 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 our 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 we are able
to incur. The Amended and Restated Senior Secured Credit Facility also allows for the voluntary
repurchase of any debt or other convertible debt, so long as the Amended and Restated Senior Secured
Credit Facility is not in default and we maintain availability under our revolving credit facility of more
than $365.0 million.
The Amended and Restated Senior Secured Credit Facility has a financial covenant that requires
us 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 $200.0 million or (b) on the third consecutive
business day on which availability under the revolving credit facility is less than $250.0 million 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
$250.0 million. As of February 27, 2016, 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 provides for customary events of
default including nonpayment, misrepresentation, breach of covenants and bankruptcy. It is also an
event of default if we fail to make any required payment on debt having a principal amount in excess
of $50.0 million or any event occurs that enables, or which with the giving of notice or the lapse of
time would enable, the holder of such debt to accelerate the maturity or require the repayment
repurchase, redemption or defeasance of such debt.
We also have two second priority secured term loan facilities. The first includes a $470.0 million
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 we choose
to make LIBOR borrowings, or at Citibank’s base rate plus 3.75%. The second includes a
$500.0 million Tranche 2 Term Loan. The Tranche 2 Term Loan matures on June 21, 2021 and
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