Long-term Debt and Borrowing Facilities

The following table provides the Company’s debt balance, net of unamortized debt issuance costs and discounts, as of February 3, 2018 and January 28, 2017:



	February 3, 2018			January 28, 2017
	(in millions)
Senior Unsecured Debt with Subsidiary Guarantee
$1 billion, 6.875% Fixed Interest Rate Notes due November 2035 (“2035 Notes”)	$	990		$	989
$1 billion, 5.625% Fixed Interest Rate Notes due February 2022 (“2022 Notes”)	994			992
$1 billion, 6.625% Fixed Interest Rate Notes due April 2021 (“2021 Notes”)	994			992
$700 million, 6.75% Fixed Interest Rate Notes due July 2036 (“2036 Notes”)	693			692
$500 million, 5.625% Fixed Interest Rate Notes due October 2023 (“2023 Notes”)	497			497
$500 million, 5.25% Fixed Interest Rate Notes due February 2028 (“2028 Notes”)	495			—
$500 million, 8.50% Fixed Interest Rate Notes due June 2019 (“2019 Notes”) (a)	—			496
$400 million, 7.00% Fixed Interest Rate Notes due May 2020 (“2020 Notes”)	398			397
Foreign Facilities with Subsidiary Guarantee	1			—
Total Senior Unsecured Debt with Subsidiary Guarantee	$	5,062		$	5,055
Senior Unsecured Debt
$350 million, 6.95% Fixed Interest Rate Debentures due March 2033 (“2033 Notes”)	$	348		$	348
$300 million, 7.60% Fixed Interest Rate Notes due July 2037 (“2037 Notes”)	297			297
Foreign Facilities without Subsidiary Guarantee	87			36
Total Senior Unsecured Debt	$	732		$	681
Total	$	5,794		$	5,736
Current Debt	(87		)	(36		)
Total Long-term Debt, Net of Current Portion	$	5,707		$	5,700

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(a)	The balance includes a fair value interest rate hedge adjustment which increased the debt balance by $2 million as of January 28, 2017.

The following table provides principal payments due on outstanding debt in the next five fiscal years and the remaining years thereafter:



Fiscal Year (in millions)
2018	$	87
2019	—
2020	400
2021	1,000
2022	1,001
Thereafter	$	3,350

Cash paid for interest was $391 million in 2017, $387 million in 2016 and $317 million in 2015.

Issuance of Notes

In January 2018, the Company issued $500 million of 5.25% notes due in February 2028. The obligation to pay principal and interest on these notes is jointly and severally guaranteed on a full and unconditional basis by certain of the Company's 100% owned subsidiaries (the “Guarantors”). The proceeds from the issuance were $495 million, which were net of issuance costs of $5 million. These issuance costs are being amortized through the maturity date of February 2028 and are included within Long-term Debt on the February 3, 2018 Consolidated Balance Sheet.

In June 2016, the Company issued $700 million of 6.75% notes due in July 2036. The obligation to pay principal and interest on these notes is jointly and severally guaranteed on a full and unconditional basis by the Guarantors. The proceeds from the issuance were $692 million, which were net of issuance costs of $8 million. These issuance costs are being amortized through the maturity date of July 2036 and are included within Long-term Debt on the Consolidated Balance Sheets.

Redemption of Notes

In January 2018, the Company used the proceeds from the 2028 Notes to redeem the $500 million 2019 Notes for $540 million. The pre-tax loss on extinguishment of this debt was $45 million (after-tax loss of $29 million), which includes write-offs of unamortized issuance costs and discounts and losses related to terminated interest rate swaps associated with the 2019 Notes. This loss is included in Other Income (Loss) in the 2017 Consolidated Statement of Income.

In July 2016, the Company used the proceeds from the 2036 Notes to redeem the $700 million 2017 Notes for $742 million. The pre-tax loss on extinguishment of this debt was $36 million (after-tax net loss of $22 million), which is net of gains of $7 million related to terminated interest rate swaps associated with the 2017 Notes. This loss is included in Other Income (Loss) in the 2016 Consolidated Statement of Income.

Revolving Facility

In May 2017, the Company entered into an Amendment of its secured revolving credit facility. The Amendment maintains the aggregate amount of the commitments of the lenders under the Revolving Facility at $1 billion and extends the termination date from July 18, 2019 to May 11, 2022. The Amendment allows certain of the Company's non-U.S. subsidiaries to borrow and obtain letters of credit in U.S. dollars, Canadian dollars, Euros, Hong Kong dollars or British pounds.

In addition, the Amendment reduced the commitment fees payable under the Revolving Facility, which are based on the Company's long-term credit rating, to 0.25% per annum. The Amendment did not modify the Company's quantitative covenant requirements, but did provide an increased limit on restricted payments in the event the Company does not meet the criteria to make these payments without limitation and provides greater flexibility with respect to the Company’s ability to grant liens on assets.

The Company incurred fees related to the Amendment of the Revolving Facility of $5 million, which were capitalized and recorded in Other Assets on the February 3, 2018 Consolidated Balance Sheet and are being amortized over the remaining term of the Revolving Facility.

The Revolving Facility fees related to committed and unutilized amounts are 0.25% per annum, and the fees related to outstanding letters of credit are 1.50% per annum. In addition, the interest rate on outstanding U.S. dollar borrowings is LIBOR plus 1.50% per annum. The interest rate on outstanding foreign denominated borrowings is the applicable benchmark rate plus 1.50% per annum.

The Revolving Facility contains fixed charge coverage and debt to EBITDA financial covenants. The Company is required to maintain a fixed charge coverage ratio of not less than 1.75 to 1.00 and a consolidated debt to consolidated EBITDA ratio not exceeding 4.00 to 1.00 for the most recent four-quarter period. In addition, the Revolving Facility provides that investments and restricted payments may be made, without limitation on amount, if (a) at the time of and after giving effect to such investment or restricted payment, the ratio of consolidated debt to consolidated EBITDA for the most recent four-quarter period is less than 3.00 to 1.00 and (b) no default or event of default exists. As of February 3, 2018, the Company was in compliance with both of its financial covenants, and the ratio of consolidated debt to consolidated EBITDA was less than 3.00 to 1.00.

As of February 3, 2018, there were no borrowings outstanding under the Revolving Facility.

The Revolving Facility supports the Company’s letter of credit program. The Company had $9 million of outstanding letters of credit as of February 3, 2018 that reduced its remaining availability under the Revolving Facility.

Foreign Facilities

In addition to the Revolving Facility, the Company maintains various revolving and term loan bank facilities to support operations in Greater China. These facilities allow certain of the Company's Greater China subsidiaries to borrow and obtain letters of credit in U.S. dollars and Chinese yuan.

During the fourth quarter of 2017, the Company entered into a new revolving facility with availability totaling $100 million. The obligation to pay principal and interest is jointly and severally guaranteed on a full and unconditional basis by L Brands, Inc. and the Guarantors. The interest rates on outstanding borrowings are based upon the applicable benchmark rate for the currency of each borrowing. During 2017, the Company borrowed $1 million under this facility. This borrowing, which matures on May 11, 2022, is included within Long-term Debt on the February 3, 2018 Consolidated Balance Sheet.

The Company also maintains various revolving and term loan bank facilities that are guaranteed by L Brands, Inc. with availability totaling $100 million. The interest rates on outstanding borrowings are based upon the applicable benchmark rate for the currency of each borrowing. During 2017, the Company borrowed $95 million and made payments of $44 million under these facilities. The maximum daily amount outstanding at any point in time during 2017 was $97 million. Current borrowings on these facilities mature between February 6, 2018 and December 18, 2018 and are included within Current Debt on the February 3, 2018 Consolidated Balance Sheet.