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 the company’s previously reported $12.8 billion bridge facility commitment.
This 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 this acquisition.
According to a related 8-K filing and term sheet, UBS AG served as administrative agent for the lender group. UBS Securities, HSBC Securities and Merrill Lynch served as joint lead arrangers and joint lead bookrunners. HSBC and Merrill Lynch served as co-syndication agents. Bank of Tokyo-Mitsubishi UFJ, J.P. Morgan Securities, Lloyds Securities, Mizuho Bank and UniCredit Bank served as join lead arrangers and co-documentation agents. Wells Faro Securities served as join lead arranger and Wells Fargo Bank as co-documentation agent.
“The term loan facilities constitute a key milestone in securing permanent financing for the proposed acquisition of Rite Aid,” said George Fairweather, EVP and global CFO 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 on October 27, 2015, is subject to approval of Rite Aid’s stockholders and satisfaction of other customary closing conditions, including expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The transaction is expected to close in the second half of calendar 2016.