Rite Aid Corp. is asking some of its creditors for a few more years of patience while it tries to turn around the struggling drugstore chain, Bloomberg News reported. Bondholders are being asked to swap $750 million of Rite Aid’s unsecured 2023 notes for securities that wouldn’t be paid back for three more years, according to a statement. They’d also have to accept a haircut on their holdings. In return, the new notes would be secured by Rite Aid’s assets and pay a higher interest rate. The debt swap was disclosed as part of a first-quarter earnings release that included a net loss from continuing operations of $72.7 million. Rite Aid withdrew its forecasts, citing effects of the coronavirus pandemic on its business. The proposed swap would exchange the unsecured 2023 notes that pay interest of 6.125 percent for secured notes that come due in 2026 and pay 8 percent. Participating bondholders would receive $800 in new notes and $194 in cash for every $1,000 of face value if they tender early. Rite Aid, based in Camp Hill, Pennsylvania, is also asking bondholders for permission to create more secured debt.
