Rite Aid 2015 Annual Report Download - page 40

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of our 8.00% Notes, $300.0 million and (ii) on and after the repayment of our 8.00% Notes,
$365.0 million.
As of January 13, 2015, 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 (i) in the case of dates prior to
the repayment of our 8.00% Notes, $175.0 million and (ii) in the case of dates on and after the
repayment of our 8.00% Notes, $200.0 million 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 our 8.00% Notes, $225.0 million and (ii) in the case of dates on or after the repayment of our 8.00%
Notes, $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 (i) in the case of dates prior to the repayment of our 8.00% Notes, $225.0 million and
(ii) in the case of dates on or after the repayment of our 8.00% Notes, $250.0 million. 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 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. The mandatory repurchase of the 8.5% convertible
notes due 2015, any escrow notes issued in connection with the Pending Acquisition or any other
convertible debt are excluded from this event of default.
We also have two second priority secured term loan facilities. The first includes a $470.0 million
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 we choose to make LIBOR borrowings, or at Citibank’s base rate plus
3.75%. The second includes a $500.0 million 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 we choose to make LIBOR
borrowings, or at Citibank’s base rate plus 2.875%.
The second priority secured term loan facilities and the indentures that govern our secured and
guaranteed unsecured notes contain restrictions on the amount of additional secured and unsecured
debt that can be incurred by us. As of February 28, 2015, the amount of additional secured debt that
could be incurred under the most restrictive covenant of the second priority secured term loan facilities
and these indentures was approximately $1.5 billion (which amount does not include the ability to enter
into certain sale and leaseback transactions). However, we currently cannot incur any additional
secured debt assuming a fully drawn revolver and the outstanding letters of credit. The ability to issue
additional unsecured debt under these indentures is generally governed by an interest coverage ratio
test. As of February 28, 2015, we had the ability to issue additional unsecured debt under the second
lien credit facilities and other indentures.
Other 2015 Transactions
On October 15, 2014, we completed the redemption of all of the outstanding $270.0 million
aggregate principal amount of 10.25% senior notes due October 2019 at their contractually determined
early redemption price of 105.125% of the principal amount, plus accrued interest. We funded this
40