Duane Reade Holdings, Inc. Announces Closing of Offering of $300 Million of 11.75% Senior Secured Note...( NEW YORK Aug. 7 /- Duane Reade ...),Health

NEW YORK, Aug. 7 /PRNewswire/ -- Duane Reade Holdings, Inc. announced today that its wholly-owned subsidiaries, Duane Reade Inc. and Duane Reade (collectively, the "Issuers"), had closed their offering of $300.0 million aggregate principal amount of Senior Secured Notes due August 1, 2015 (the "Notes"). The Notes 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 Notes were issued in a private offering that was exempt from the registration requirements of the Securities Act of 1933.

The Issuers used the net proceeds from the Notes offering, together with a portion of the proceeds from a $125 million preferred equity investment (the "Equity Investment") by entities associated with Oak Hill Capital Partners, L.P., to purchase approximately $205.0 million of the Issuers' Senior Secured Floating Rate Notes due 2010 (the "Floating Rate Notes"), approximately $143.3 million of the Issuers' 9.75% Senior Subordinated Notes due 2011 and pay any related consent fees in the Issuers' previously-announced cash tender offer for such securities (collectively, the "Offers") and to optionally redeem approximately $5.0 million of the Floating Rate Notes, which were not tendered in the Offers, pursuant to the optional redemption notice given today.

The offer and sale of the Notes have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent such registration or an exemption from the registration requirements of such Act.

John Lederer, President and Chief Executive Officer, commented, "We are very pleased to complete this financing which reduces our leverage, improves our financial flexibility, and provides long-term capital support for the continued transformation of Duane Reade."

About Duane Reade

Founded in 1960, Duane Reade is the
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