New Issue: Rite Aid sells $115 million 3.25-year mandatory at 5.5%, up 20%

By Ronda Fears

Nashville, Aug. 17 - Rite Aid Corp. sold $115 million of 3.25-year mandatory convertible preferreds at par of 25 to yield 5.5% with a 20% initial conversion premium via joint bookrunners Citigroup Global Markets and JPMorgan Securities.

The issue priced at the wide end of guidance for a 5.0% to 5.5% dividend and initial conversion premium of 20% to 24%.

The Camp Hill, Pa.-based drugstore chain plans to use proceeds, along with cash on hand, to take out its 8% series F cumulative convertible pay-in-kind convertible preferreds at 105 plus accrued interest.

Issuer:	Rite Aid Corp.
Issue:	Convertible mandatory preferreds
Bookrunners:	Citigroup Global Markets (stabilization agent) and JPMorgan Securities
Amount:	$115 million
Greenshoe:	$15 million
Maturity:	Nov. 17, 2008
Dividend:	5.5%
Price:	Par, $25
Yield:	5.5%
Conversion premium:	20%
Conversion price:	$4.42/$5.304
Conversion ratio:	4.7134/5.6561
Takeover protection:	Yes
Call:	Provisional, with 180% hurdle
Put:	No
Price talk:	5.0-5.5%, up 20-24%
Pricing date:	Aug. 16, after the close
Settlement date:	Aug. 22
Stock price:	$4.42 at close Aug. 16
Distribution:	Registered

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