Paving the way for its proposed acquisition of Rite Aid, Walgreens Boots Alliance has completed the placement of $5 billion of term loan facilities, evenly split between two tranches of $2.5 billion each, with three- and five-year maturities, respectively, and a $7.8 billion term loan bridge facility.
These facilities replace a previously reported $12.8 billion bridge facility commitment, the company said.
The company also noted that the financing has been put in place as part of the financing of Walgreens Boots Alliance’s proposed acquisition of Rite Aid Corporation. Drawing under the facilities is subject to the closing of the acquisition.
“The term loan facilities constitute a key milestone in securing permanent financing for the proposed acquisition of Rite Aid,” said George Fairweather, evp/global chief financial officer of Walgreens Boots Alliance. “We are very pleased with the high level of interest and support from our banking partners, which resulted in the oversubscription of the transaction. The $5 billion pre-payable term facilities provide us with diversification of funding sources and the flexibility to reduce leverage over time.”
The proposed acquisition by Walgreens Boots Alliance of Rite Aid, which was announced in October, is subject to approval of Rite Aid’s stockholders and other customary closing conditions. The transaction is expected to close in the second half of calendar 2016.