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Rite Aid secures $290 million in financing from GE Capital
July 22nd, 2009
NORWALK, Conn. – Rite Aid Corp. has obtained a commitment from GE Capital for $290 million of new money for a $1 billion asset-based revolving line of credit.
GE Capital's Corporate Retail Finance unit, which announced the loan Wednesday, said it will be used for working capital. GE Capital Markets served as joint lead arranger for the financing.
“As a long-standing GE borrower, we value having a lender who understands our business, has in-depth knowledge of the retail sector and access to capital,” Rite Aid chief financial officer Frank Vitrano said in a statement. “GE showed its commitment throughout the loan process ensuring we secured the liquidity we required.”
“Especially in this challenging market environment, we’re working closely with customers to provide capital to help meet their business objectives,” commented Jim Hogan, managing director of Corporate Retail Finance for Norwalk-based GE Capital.
Rite Aid reported the $1 billion revolver in early June as part of a comprehensive refinancing plan. At the time, the drug store chain said it had obtained $900 million in commitments.
Camp Hill, Pa.-based Rite Aid said late last month that it had wrapped up $1.9 billion in refinancing.
After amending its senior secured credit facility to allow more flexibility for refinancing, the company incurred $525 million in senior secured term loans due 2015 (used to repay existing term and revolving loans due 2010), issued $410 million in senior secured notes due 2016 (used to repay existing revolving loans) and incurred a new $1 billion revolving credit facility expiring in 2012 to replace the remaining portion of a revolver expiring in 2010. Rite Aid said it completed the $1 billion revolver on June 26 and had previously announced completion of the term loan and senior secured notes.
Rite Aid's progress in its refinancing plan, along with other moves to boost its liquidity and improve operating results, recently led two major rating agencies, Standard & Poor's and Fitch Ratings, to upgrade their outlook on the retailer to stable from negative.
Expenses from the refinancing, however, caused Rite Aid to lower its fiscal 2010 earnings guidance when it reported first quarter results in late June.