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Rite Aid Corporation (RAD) News: First Quarter Results, $400 Million Refinancing & Riskier Loan

Editor’s Note: Related tickers: Rite Aid Corporation (NYSE:RAD)

Will Rite Aid Beat Earnings Est. Again? (Nasdaq)
Rite Aid Corporation (NYSE:RAD) is set to declare its first-quarter fiscal 2014 results on Jun 20. The last reported quarter was the second consecutive quarter in which the company posted profits and easily surpassed the Zacks Consensus Estimate of break-even earnings. Let us now look at how things have developed for the imminent announcement. …The year-over-year improvement in bottom-line results for the fourth quarter of fiscal 2013 was primarily driven by the introduction of high margin generic (non-brand) drugs and increased prescriptions at its pharmacy counters. Generic drugs are less expensive but generate higher gross margins for the company.

Rite Aid Corporation (NYSE:RAD)

Rite Aid to refinance $400 million worth of debt (DrugStoreNews)
Rite Aid Corporation (NYSE:RAD) announced Monday a new debt-refinancing plan, the second such plan in two weeks. The company announced that it would offer for sale a new series of senior notes due 2021 worth $400 million, which would be unsecured, unsubordinated obligations of Rite Aid Corporation (NYSE:RAD) and would be guaranteed by the company. The retailer said on June 7 that it would purchase $500 million worth of 7.5% senior notes due 2017. Proceeds from the offering will be used to redeem $400 million of the company’s outstanding 9.5% senior notes due 2017. Rite Aid Corporation (NYSE:RAD)’s debt currently stands at about $6 billion, according to the company’s 2013 annual report.

Riskier Junk-Loan Demand Soaring Like It’s 2007 (Bloomberg)
Junk-rated borrowers from Rite Aid Corporation (NYSE:RAD) to Atkins Nutritionals Holdings Inc. are raising a riskier type of loan that offers a lesser claim on their assets at a pace last seen before the financial crisis. Second-lien loan issuance has climbed to $17.1 billion this year, versus $18.6 billion in all of last year and on pace to surpass the record $28.7 billion issued in 2007, according to data compiled by Bloomberg. Rite Aid Corporation (NYSE:RAD), the third-largest U.S. drugstore chain, reduced the interest rate on its $500 million loan due to increased investor demand, while dieting company Atkins raised $355 million in loans, including second-lien debt, to fund a dividend.

Rite Aid Announces Offering of Senior Notes as Part of a Refinancing of Certain of Its Outstanding Indebtedness (4-Traders)
Rite Aid Corporation (NYSE:RAD) announced today its intention to offer $400.0 million aggregate principal amount of a new series of senior notes due 2021 (the “Notes”). The Notes will be unsecured, unsubordinated obligations of Rite Aid Corporation (NYSE:RAD) and will be guaranteed by substantially all of Rite Aid’s subsidiaries. Rite Aid intends to use the net proceeds of the offering of the Notes, together with available cash and/or borrowings under Rite Aid Corporation (NYSE:RAD)’s revolving credit facility, to redeem a corresponding amount of its outstanding 9.5% senior notes due 2017. Rite Aid’s results of operations, including net income and earnings per share, and guidance could be affected by fees, expenses and charges related to the refinancing transactions.