MEMPHIS, Tenn. — Fred’s Pharmacy received a $75 million increase in its revolving loan commitment from $150 million to $225 million. As part of Fred’s revolving loan credit agreement with Regions Bank and Bank of America, up to $15 million of borrowings under the revolving loan facility may be used to purchase up to 10 Rite Aid divested stores should the Walgreens Boots Alliance acquisition of Rite Aid be approved.
Revolving credit is typically a type of credit that does not have a fixed number of payments. Corporate revolving credit facilities are often used to provide liquidity for a company's day-to-day operations. It is generally an arrangement which allows for the loan amount to be withdrawn, repaid, and redrawn again in any manner and any number of times, until the arrangement expires.
Memphis-based Fred’s filed a Form 8-K with the Securities and Exchange Commission announcing the revolving loan commitment increase. The filing represents a third amendment to the agreement dated April 19, 2015.
Fred's was initially expected to acquire 865 divested Rite Aid stores if the merger agreement is approved. However, the U.S. Federal Trade Commission could now require that more than 1,000 stores be divested in order to give its stamp of approval on the transaction.