By Ben Unglesbee
Source: Retail Dive

  • Rite Aid bought back more than $190 million of its own bonds ahead of schedule in a cash offer below their original face value, according to an announcement last week.
  • The company, which has struggled for years under its debt load, said in an earnings presentation the move would reduce the debt that comes due in 2025. Rite Aid has paid down additional debt through sales of script files at closed stores and expects to pay down more this year with free cash flow.
  • Analysts with S&P Global ratings deemed the recent debt purchase as a distressed exchange. S&P has a CCC+ rating for Rite Aid with a negative outlook based on the risk that the drugstore chain’s “turnaround efforts may not materialize quickly enough to increase its presently weak cash flow generation and margins.”

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