Walgreens 2015 Annual Report Download - page 56

respect to the 2017 Notes was equal to 101.677% of the aggregate principal amount of such notes to be
redeemed, plus accrued interest thereon to, but excluding, the redemption date. The redemption price with
respect to the 2019 Notes was equal to 111.734% of the aggregate principal amount of such notes to be
redeemed, plus accrued interest thereon to, but excluding, the redemption date.
On August 10, 2015, upon the completion of the redemptions described above, the Walgreens guarantees of the
WBA notes and the Term Loan Agreement and the Revolving Credit Agreement were unconditionally released
and discharged in accordance with their terms.
Pending Transaction. The cash consideration payable to Rite Aid stockholders pursuant to the Merger
Agreement described under “Recent Development” above is expected to be financed with a combination of cash
on hand and debt financing. On October 27, 2015, the Company entered into a bridge facility commitment letter
(the “Commitment Letter”) with UBS Securities LLC and UBS AG, Stamford Branch for a $12.8 billion senior
unsecured bridge facility (the “Facility”). Subject to certain customary terms and conditions, the Facility may be
used to fund, in part, the cash consideration payable to Rite Aid stockholders pursuant to the Merger Agreement,
to repay the indebtedness of Rite Aid to be repaid in connection with the transaction and to pay related fees and
expenses.
Borrowings under the Facility will bear interest at a fluctuating rate equal to, at our option, LIBOR or the
applicable base rate, plus a margin calculated as described in the Commitment Letter. We will also pay certain
customary fees as described in the Commitment Letter. The Facility, if funded, will mature 364 days after the
initial borrowings; provided that the Company can extend up to $3.0 billion of the Facility for an additional 90
day period if desired. The closing of the Facility and the availability of the loans thereunder are subject to the
satisfaction of certain customary conditions as provided in the Commitment Letter. The definitive loan
documentation for the Facility will contain certain customary representations and warranties, affirmative,
negative and financial covenants and events of default consistent with the terms set forth in the Commitment
Letter and otherwise substantially similar to the terms set forth in our existing revolving credit agreement, dated
as of November 10, 2014, in all material respects unless otherwise mutually and reasonably agreed.
As of October 28, 2015, the credit ratings of Walgreens Boots Alliance were:
Rating Agency Long-Term Debt Rating
Commercial
Paper Rating Outlook
Moody’s Baa2 P-2 On review for downgrade
Standard & Poor’s BBB A-2 Negative
In connection with the pending acquisition of Rite Aid, we expect that each of these rating agencies will review
and update their ratings of our credit to reflect their assessment of the transaction and related matters. There can
be no assurance that any particular rating will be assigned. In assessing our credit strength, both Moody’s and
Standard & Poor’s consider various factors including our business model, capital structure, financial policies and
financial performance. Our credit ratings impact our borrowing costs, access to capital markets and operating
lease costs. The rating agency ratings are not recommendations to buy, sell or hold our debt securities or
commercial paper. Each rating may be subject to revision or withdrawal at any time by the assigning rating
agency and should be evaluated independently of any other rating.
Pursuant to our arrangements with AmerisourceBergen, we have the right, but not the obligation, to purchase a
minority equity position in AmerisourceBergen over time through open market purchases and pursuant to
warrants to acquire AmerisourceBergen common stock. We can acquire up to 19,859,795 shares in the open
market, which represents approximately 7% of the outstanding AmerisourceBergen common stock on a fully
diluted basis, assuming exercise in full of the warrants. The amount of permitted open market purchases is
subject to increase in certain circumstances. We have purchased a total of approximately 11.5 million
AmerisourceBergen shares in the open market. We have funded and plan to continue funding these purchases
over time. Share purchases may be made from time to time in open market transactions or pursuant to
instruments and plans complying with Rule 10b5-1.
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