CAMP HILL, Pa.--(BUSINESS WIRE)--Rite Aid Corporation (NYSE: RAD) today announced that it has commenced cash tender offers to purchase up to $100 million aggregate principal amount of its outstanding 7.70% Senior Notes due 2027 and 6.875% Senior Notes due 2028. The Tender Offers support the Company’s objective to reduce its total indebtedness while managing its liquidity and interest expense.

The following table sets forth certain material terms of the Tender Offers:

The Company also announced that it recently completed a privately negotiated purchase from a noteholder and its affiliated funds of $84.1 million aggregate principal amount of the Notes at the same purchase prices as the “Total Consideration” set forth in the table above. The Company intends to fund this privately negotiated repurchase and the Tender Offers with borrowings under its senior secured revolving credit facility and other available cash.

The Notes are unsecured and are not guaranteed by any of the Company’s subsidiaries. Consequently, they are effectively subordinated to all of the Company’s other outstanding indebtedness.

In order to be eligible to receive the “Total Consideration,” including the “Early Tender Premium,” for a series of Notes, as set forth in the table above, holders must validly tender and not withdraw their Notes at or prior to 5:00 p.m., New York City time, on October 28, 2019 (such date and time, as it may be extended, the “Early Tender Date”). Holders who tender their Notes after the Early Tender Date will only be eligible to receive the “Tender Offer Consideration”, which is the Total Consideration less the Early Tender Premium. The Tender Offers will expire at 11:59 p.m., New York City time, on November 12, 2019, unless extended or earlier terminated by Rite Aid (the “Expiration Date”).

In addition to the consideration set forth in the table above, all holders of Notes accepted for purchase in the Tender Offers will receive accrued and unpaid interest on such Notes from the last interest payment date with respect to such Notes to, but not including, the applicable settlement date.

In the Tender Offers, Rite Aid is offering to purchase up to $100 million aggregate principal amount of Notes (subject to increase as described below, the “Maximum Tender Amount”). If the aggregate principal amount of Notes tendered exceeds the Maximum Tender Amount, the Company will accept tendered Notes for purchase on a pro rata basis (with Notes of both series being considered together as a single class); provided, however, that all Notes tendered at or prior to the Early Tender Date will be accepted for purchase before any Notes tendered after the Early Tender Date are accepted. Accordingly, if the Tender Offers are fully subscribed as of the Early Tender Date, no Notes tendered after the Early Tender Date will be accepted for purchase. The Company reserves the right, but is under no obligation, to increase the Maximum Tender Amount at any time.

Subject to the satisfaction or waiver of the conditions to the Tender Offers, payment for Notes validly tendered at or prior to the Early Tender Date and accepted for purchase is expected to occur on October 30, 2019, the second business day following the Early Tender Date. If any Notes tendered after the Early Tender Date are accepted for purchase, payment for such Notes is expected to occur promptly following the Expiration Date.

With respect to any valid tender in respect of a series of Notes accepted by the Company, the Company will also pay the relevant soliciting retail broker a fee of $2.50 per $1,000 principal amount of such series of Notes, provided that such fee will only be paid with respect to the first $200,000 aggregate principal amount of each series of Notes tendered by any individual holder. The payment of such soliciting broker fee with respect to a series of Notes is subject to satisfaction of the conditions set forth in the Offer to Purchase.

Tendered Notes may be withdrawn at or prior to 5:00 p.m., New York City time, on October 28, 2019, unless extended by Rite Aid. The complete terms and conditions of the Tender Offers are set forth in Rite Aid’s Offer to Purchase dated October 15, 2019 (the “Offer to Purchase”).

The Tender Offers are subject to, and conditioned upon, the satisfaction or waiver of certain customary conditions described in the Offer to Purchase. However, the consummation of the Tender Offers is not conditioned upon any minimum amount of Notes being tendered.

Rite Aid Corporation, which generated fiscal 2019 annual revenue of $21.6 billion, is one of the nation's leading drugstore chains with 2,466 stores in 18 states and pharmacy benefit management (PBM) capabilities through EnvisionRxOptions and its affiliates. At Rite Aid, we have a personal interest in our customers’ health and wellness and deliver the products and services they need to lead healthier lives.