RAD 6⅛ 4/1/23

Rite Aid Corp

Consumer, Healthcare, Credit


Publicly traded companies mentioned herein: Albertsons Companies Inc (Private Co with Public Debt), Rite Aid Corp (RAD), Walgreens Boots Alliance (WBA)

Highlights

Rite Aid's inability to close the deal with Albertsons and recent struggles have left it in a challenging position. The stock has fallen to sub-$0.50 (split adjusted; a sub-$500MM market cap), and the debt remains elevated at ~$3.2B (net debt). Despite overall industry pressure that has led to declines in Rite Aid’s earnings, the company is still either “modestly FCF positive or not burning cash,” said the presenter. And, with substantial asset value covering bondholders, the risk/reward is favorable for a long position in the 6⅛ senior secured guaranteed debt (trading at ~84, an 11% YTW).

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Idea Discussion

Commentor 1 - 2 weeks ago

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