Deal means 'flexibility' for Rite Aid.
CAMP HILL, Pa. -- Bite Aid Corp. obtained $1.85 billion in new financing late last month that executives say will allow the 3,400-store chain to push off some of its debt maturities by three years.
The refinancing of our credit agreement is another positive development for Bite Aid," chairman and chief executive officer Bob Miller comments. "The new facility gives us greater flexibility to operate our business, because it extends the maturity of a significant portion of our debt by an additional three years and provides more capital to retire shorter maturities and invest in our business."
The new secured financing consists of a $1.15 billion term loan and a $700 million revolving credit line.
Both are to mature in April 2008.
Originally Rite Aid had said the credit line under the new financing would be closer to $850 million. However, Miller said the company's recent completion of a $150 million offering of 9.25% senior notes due in 2012 allowed Rite Aid to trim $150 million from the credit line.
Miller stresses that Rite Aid has drawn down the credit line only to support its letters of credit.
He says the company will use the proceeds of the new credit line to repay the company's $968.6 million senior secured credit facility and its $107 million synthetic lease. Both are due in March 2005.
It will also use the new credit line to replace its $407.5 million credit facility.
"The fact that we were able to complete the financing so far ahead of schedule is a tribute to the improvement we continue to make in our operating results," Miller remarks.
2003 SALES SCOREBOARD
May 2003 vol.: $11.44 bil.
Gain vs. May 2002: 8.5%
Same-store increase: 7.0%
Dollar vol.: $56.44 bil.
Gain vs. 2002: 7.3%
Same-store increase: 5.6%
Source: Racher Press research.