Rite Aid 2015 Annual Report Download - page 94

RITE AID CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Years Ended February 28, 2015, March 1, 2014 and March 2, 2013
(In thousands, except per share amounts)
13. Indebtedness and Credit Agreement (Continued)
Credit Facility
On January 13, 2015, the Company amended and restated its senior secured credit facility
(‘‘Amended and Restated Senior Secured Credit Facility’’ or ‘‘revolver’’), which, among other things,
increased borrowing capacity from $1,795,000 to $3,000,000 (increasing to $3,700,000 upon the
repayment of its 8.00% senior secured notes due August 2020 (‘‘8.00% Notes’’)), and extended the
maturity to January 2020 from February 2018. The Company used borrowings under the revolver to
repay and retire all of the $1,143,650 outstanding under its Tranche 7 Senior Secured Term Loan due
2020, along with associated fees and expenses. Borrowings under the revolver bear interest at a rate per
annum between LIBOR plus 1.50% and LIBOR plus 2.00% based upon the average revolver
availability (as defined in the Amended and Restated Senior Secured Credit Facility). The Company is
required to pay fees between 0.250% and 0.375% per annum on the daily unused amount of the
revolver, depending on the Average Revolver Availability (as defined in the Amended and Restated
Senior Secured Credit Facility). Amounts drawn under the revolver become due and payable on
January 13, 2020.
On February 10, 2015, the Company amended the Amended and Restated Senior Secured Credit
Facility to, among other things, increase the flexibility of Rite Aid to incur and/or issue unsecured
indebtedness, including in connection with the arrangements contemplated by the merger agreement
executed in connection with the pending acquisition of EnvisionRx, and made certain other
modifications to the covenants applicable to Rite Aid and its subsidiaries.
The Company’s ability to borrow under the revolver is based upon a specified borrowing base
consisting of accounts receivable, inventory and prescription files. At February 28, 2015, the Company
had $1,725,000 of borrowings outstanding under the revolver and had letters of credit outstanding
against the revolver of $71,084, which resulted in additional borrowing capacity of $1,203,916.
The Amended and Restated Senior Secured Credit Facility restricts the Company and the
subsidiary guarantors from accumulating cash on hand, and under certain circumstances, requires the
funds in the Company’s deposit accounts to be applied first to the repayment of outstanding revolving
loans under the senior secured credit facility and then to be held as collateral for the senior
obligations.
The Amended and Restated Senior Secured Credit Facility allows the Company to have
outstanding, at any time, up to $1,500,000 (or $1,800,000 solely to the extent incurred in anticipation of
the funding of the Pending Acquisition) in secured second priority debt, split-priority term loan debt,
unsecured debt and disqualified preferred stock in addition to borrowings under the Amended and
Restated Senior Secured Credit Facility and existing indebtedness, provided that not in excess of
$750,000 of such secured second priority debt, split-priority term loan debt, unsecured debt and
disqualified preferred stock shall mature or require scheduled payments of principal prior to 90 days
after the latest of (a) the fifth anniversary of the effectiveness of the Amended and Restated Senior
Secured Credit Facility and (b) the latest maturity date of any Term Loan or Other Revolving Loan
(each as defined in the Amended and Restated Senior Secured Credit Facility) (excluding bridge
facilities allowing extensions on customary terms to at least the date that is 90 days after such date and,
with respect to any escrow notes issued by Rite Aid, excluding any special mandatory redemption of
the type described in clause (iii) of the definition of ‘‘Escrow Notes’’ in the Amended and Restated
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