Rite Aid 2014 Annual Report Download - page 87

RITE AID CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Years Ended March 1, 2014, March 2, 2013 and March 3, 2012
(In thousands, except per share amounts)
11. Indebtedness and Credit Agreement (Continued)
Company chooses to make LIBOR borrowings, or at Citibank’s base rate plus 3.75%. The Tranche 1
Term Loan is subject to a 1.00% LIBOR floor per annum.
On June 21, 2013, the Company entered into a new second priority secured term loan facility,
which 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 senior secured credit facility, second priority secured term loan facilities, secured
guaranteed notes and unsecured guaranteed notes. The senior secured credit facility, second priority
secured term loan facilities and secured guaranteed notes are secured, on a senior or second priority
basis, as applicable, by a lien on, among other things, accounts receivable, inventory and prescription
files of the subsidiary guarantors. The subsidiary guarantees related to the Company’s senior secured
credit facility, second priority secured term loan facilities and secured guaranteed notes and, on an
unsecured basis, the unsecured guaranteed notes are full and unconditional and joint and several, and
there are no restrictions on the ability of the Company to obtain funds from its subsidiaries. Also, the
Company has no independent assets or operations, and subsidiaries not guaranteeing the credit facility,
second priority secured term loan facilities and applicable notes are minor. Accordingly, condensed
consolidating financial information for the Company and subsidiaries is not presented.
Other 2014 Transactions
In June 2013, the Company completed a tender offer for its 7.5% senior secured notes due 2017 in
which $419,237 aggregate principal amount of the outstanding 7.5% notes were tendered and
repurchased. In July 2013, the Company redeemed the remaining 7.5% notes for $85,154, 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
the Company’s revolving credit facility and available cash.
On July 2, 2013, the Company issued $810,000 of its 6.75% senior notes due 2021. The Company’s
obligations under the notes are fully and unconditionally guaranteed, jointly and severally, on an
unsubordinated basis, by all of its subsidiaries that guarantee the Company’s obligations under the
senior secured credit facility, the second priority secured term loan facilities and the outstanding 8.00%
senior secured notes due 2020, 10.25% senior secured notes due 2019 and 9.25% senior notes due
2020. The Company used the net proceeds of the 6.75% notes, borrowings under its revolving credit
facility and available cash to repurchase and repay all of the Company’s outstanding $810,000 aggregate
principal of 9.5% senior notes due 2017.
In July 2013, the Company completed a tender offer for its 9.5% notes in which $739,642
aggregate principal amount of the outstanding 9.5% notes were tendered and repurchased. In August
2013, the Company redeemed the remaining 9.5% notes for $73,440, which included the call premium
and interest to the redemption date.
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