Duane Reade, Inc. and Duane Reade raise $300 million through private placement senior secured notes

Wed. August 12, 2009; Posted: 02:19 PM

Aug 12, 2009 (Datamonitor Financial Deals Tracker via COMTEX) -- DRD | Quote | Chart | News | PowerRating -- Duane Reade, Inc. and Duane Reade, the wholly-owned subsidiaries of Duane Reade Holdings, Inc., have completed their private placement of $300 million aggregate principal amount of senior secured notes due August 1, 2015.

Duane Reade Holdings is a US-based operator of a chain of drugstores.

Announcement (July 31, 2009):

Duane Reade, Inc. and Duane Reade have priced their offering of $300 million aggregate principal amount of senior secured notes due August 1, 2015. The notes would bear interest at an annual rate of 11.75%. The notes were priced at 97.417%, representing a yield to maturity of 12.375%. The offering of the notes is expected to close on August 7, 2009.

Goldman, Sachs & Co. and Banc of America Securities, LLC are acting as dealer managers and solicitation agents for the offering.

Deal Value (US$ Million) 300
Deal Type                Private Placement
Sub-Category             None
Deal Status              Completed: 2009-08-07

Deal Participants

Target 1 (Company) Duane Reade
Target 2 (Company) Duane Reade, Inc.
Acquirer (Company) Undisclosed Investors

Deal Rationale

Duane Reade, Inc. and Duane Reade intends to use net proceeds from the notes offering, together with a portion of the proceeds from a $125 million preferred equity investment by entities associated with Oak Hill Capital Partners, L.P., to purchase approximately $205 million of the Duane Reade, Inc. and Duane Reade's senior secured floating rate notes due 2010, approximately $143.3 million of the Duane Reade, Inc. and Duane Reade's 9.75% senior subordinated notes due 2011.

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