Rite Aid tenders for 8 1/8%, 9¼%, 7½% notes

By Jennifer Chiou

New York, June 4 - Rite Aid Corp. said it began a cash tender offer for any and all of its 8 1/8% senior secured notes due 2010, 9¼% senior notes due 2013 and 7½% senior secured notes due 2015.

There is $710 million of the three series outstanding.

As part of the tender offer, Rite Aid is also soliciting consents from the holders of the notes for certain proposed amendments that would eliminate or modify substantially all restrictive covenants, certain events of default and other provisions contained in the indentures governing the notes, release the subsidiary guarantees and release all the collateral securing the obligations of the subsidiary guarantors under the 8 1/8% notes and 7½% notes.

The company is seeking consents from holders of at least a majority of the notes.

The consent deadline is 5 p.m. ET on June 17. The offer will end at midnight ET on July 1.

For each $1,000 principal amount, the company said it will pay $1,024.06 for the 8 1/8% notes and $1,000 for the 9¼% notes. Rite Aid will calculate the payout for the 7½% notes using a fixed spread of 75 basis points over the yield to maturity of the 3.625% Treasury due Jan. 15, 2010.

Pricing for the 7½% notes will be set at 2 p.m. ET on June 18.

The payouts include a $20.00 consent payment for those who tender by the early deadline.

Rite Aid noted that it will also pay accrued interest.

The offer is conditioned upon the receipt of debt financing sufficient to pay the total consideration and related fees and expenses.

Global Bondholder Services Corp. (866 488-1500 or 212 430-3774) is the depositary and information agent, and Citi (800 558-3745 or 212 723-6106) is the dealer manager.

Rite Aid is a drugstore chain based in Camp Hill, Pa.

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