Bonds issued by troubled drugstore chain Rite Aid Corp. sold off on Monday, after the company filed for bankruptcy, facing billions of dollars of debt related to opioid lawsuits.
The bankruptcy was expected for months, and the Wall Street Journal reported in August that Rite Aid
RAD,
was more than $3.3 billion in debt, due largely to hundreds of lawsuits related to its distribution of opioid painkillers. The bankruptcy filing stays pending litigation against the company.
Earlier this month, the New York Stock Exchange warned Rite Aid that it was “no longer in compliance” with the exchange’s minimum pricing and valuation standards after falling below the $1 threshold, and gave it six months for the stock to regain compliance. Rite Aid shares have plunged about 80% year to date.
Rite Aid said Sunday that lenders will provide $3.45 billion in financing for the chain to continue operating through the Chapter 11 bankruptcy process.
The stock was halted but the bonds were being heavily sold, as the following charts from data solutions provider BondCliQ Media Services show. The company has $4.1 billion in outstanding debt, the bulk of which comes due in 2026.
Outstanding Rite Aid debt (USD) by maturity year (Total $1.4 billion). Source: BondCliQ Media Services
There was more active buying in the bonds over the past 10 days.
Most active Rite Aid issues with net customer flow (last 10 days). Source: BondCliQ Media Services
On Monday, the bonds were selling off.
Rite Aid net customer flow (Intraday). Source: BondCliQ Media Services
For more, read: Debt-ridden Rite Aid files for bankruptcy, will close more stores
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