Rite Aid 2016 Annual Report Download - page 123

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RITE AID CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Years Ended February 27, 2016, February 28, 2015 and March 1, 2014
(In thousands, except per share amounts)
14. Indebtedness and Credit Agreement (Continued)
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.
In connection with these refinancing transactions, the Company recorded a loss on debt
retirement, including tender and call premium and interest, unamortized debt issue costs and
unamortized discount of $62,172.
As of March 2, 2013, Rite Aid Lease Management Company, a 100 percent owned subsidiary of
the Company, had 213,000 shares of its Cumulative Preferred Stock, Class A, par value $100 per share
(‘‘RALMCO Cumulative Preferred Stock’’), outstanding. The carrying amount of the RALMCO
Cumulative Preferred Stock as of November 29, 2013 was $20,763 and was recorded in Other
Noncurrent Liabilities. On November 29, 2013, the Company repurchased all of the outstanding
RALMCO Cumulative Preferred Stock for $21,034. In connection with this transaction, the Company
recorded a loss on debt retirement of $271.
Interest Rates and Maturities
The annual weighted average interest rate on the Company’s indebtedness was 5.4%, 5.8%, and
6.4% for fiscal 2016, 2015, and 2014, respectively.
The aggregate annual principal payments of long-term debt for the five succeeding fiscal years are
as follows: 2017—$90; 2018—$0; 2019—$0; 2020—$2,100,000 and $4,905,000 in 2021 and thereafter.
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