Rite Aid Announces Proposed Offering of Convertible Notes

2008-05-22 01:02:42 -

www.riteaid.com - Rite Aid Corporation (NYSE:RAD) announced today its intention to offer $150 million aggregate principal amount of convertible notes due 2015, pursuant to an effective shelf registration statement previously filed with the Securities and Exchange Commission. Rite Aid expects to grant to the underwriters an option to purchase up to an additional $8 million in aggregate principal amount of convertible notes to cover over-allotments.

Rite Aid will deliver shares of Rite Aid common stock to satisfy any future conversions of the notes. The coupon, conversion price and other terms of the notes will be determined at the time of pricing the offering. The notes will be Rite Aid's unsecured, unsubordinated obligations and will rank equally in right of payment with all of Rite Aid's other unsubordinated indebtedness.

Rite Aid intends to use the net proceeds of the offering to redeem its $150 million 6.125% Senior Notes due 2008 in accordance with their terms.

The offering is being lead managed by Citi. Copies of the prospectus and prospectus supplement related to the offering may be obtained from Citi, Brooklyn Army Terminal, 140 58th Street, 8th Floor, Brooklyn, New York 11220 (Telephone Number 718-765-6732).

This press release shall not constitute an offer to sell or a solicitation of an offer to buy the convertible notes, nor shall there be any sales of the convertible notes in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

Rite Aid Corporation is one of the nation's leading drugstore chains with more than 5,000 stores in 31 states and the District of Columbia with fiscal 2008 annual revenues of more than $24.3 billion. Information about Rite Aid, including corporate background and press releases, is available through the company's website at www.riteaid.com.

This press release may contain forward-looking statements, which are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Factors that could cause actual results to differ materially from those expressed or implied in such forward-looking statements include our high level of indebtedness, our ability to make interest and principal payments on our debt and satisfy the other covenants contained in our senior secured credit facility and other debt agreements, our ability to improve the operating performance of our stores in accordance with our long term strategy, our ability to realize the benefits of the Brooks Eckerd acquisition, our ability to hire and retain pharmacists and other store personnel, the efforts of private and public third-party payors to reduce prescription drug reimbursements and encourage mail order, competitive pricing pressures, continued consolidation of the drugstore industry, changes in state or federal legislation or regulations, the outcome of lawsuits and governmental investigations, general economic conditions and inflation, interest rate movements and access to capital. Consequently, all of the forward-looking statements made in this press release are qualified by these and other factors, risks and uncertainties. Readers are also directed to consider other risks and uncertainties discussed in documents filed by Rite Aid with the Securities and Exchange Commission. Forward-looking statements can be identified through the use of words such as "may", "will", "intend", "plan", "project", "expect", "anticipate", "could", "should", "would", "believe", "estimate", "contemplate", and "possible".

Rite Aid Corporation
Investors:
Kevin Twomey, 717-731-6540
investor@riteaid.com
or
Media:
Karen Rugen, 717-730-7766