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 May 5, 2018, February 3, 2018 and April 29, 2017:



	May 5, 2018			February 3, 2018			April 29, 2017
	(in millions)
Senior Unsecured Debt with Subsidiary Guarantee
$1 billion, 6.875% Fixed Interest Rate Notes due November 2035 (“2035 Notes”)	$	990		$	990		$	989
$1 billion, 5.625% Fixed Interest Rate Notes due February 2022 (“2022 Notes”)	994			994			993
$1 billion, 6.625% Fixed Interest Rate Notes due April 2021 (“2021 Notes”)	995			994			993
$700 million, 6.75% Fixed Interest Rate Notes due July 2036 (“2036 Notes”)	693			693			692
$500 million, 5.625% Fixed Interest Rate Notes due October 2023 (“2023 Notes”)	497			497			497
$500 million, 5.25% Fixed Interest Rate Notes due February 2028 (“2028 Notes”)	495			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			398			397
Foreign Facilities with Subsidiary Guarantee	12			1			—
Total Senior Unsecured Debt with Subsidiary Guarantee	$	5,074		$	5,062		$	5,057
Senior Unsecured Debt
$350 million, 6.95% Fixed Interest Rate Debentures due March 2033 (“2033 Notes”)	$	348		$	348		$	348
$300 million, 7.60% Fixed Interest Rate Notes due July 2037 (“2037 Notes”)	297			297			297
Foreign Facilities without Subsidiary Guarantee	89			87			44
Total Senior Unsecured Debt	$	734		$	732		$	689
Total	$	5,808		$	5,794		$	5,746
Current Debt	(89		)	(87		)	(44		)
Total Long-term Debt, Net of Current Portion	$	5,719		$	5,707		$	5,702

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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 April 29, 2017.

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 May 5, 2018 and February 3, 2018 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. In the fourth quarter of 2017, the Company recognized a pre-tax loss on extinguishment of this debt of $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.

Exchange Offer

Subsequent to May 5, 2018, the Company announced the commencement of separate private offers to eligible holders to exchange certain of its outstanding 2020 Notes, 2021 Notes and 2022 Notes (collectively, the "offers") for a series of its newly issued debt securities due 2027 and cash. The offers will expire on June 27, 2018 with a potential early settlement date of June 18, 2018, subject to certain terms and conditions.

Revolving Facility

The Company maintains a secured revolving credit facility (“Revolving Facility”). The Revolving Facility has aggregate availability of $1 billion and expires May 11, 2022. The Revolving Facility 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.

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 London Interbank Offered Rate (“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 May 5, 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 May 5, 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 May 5, 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 ("Foreign Facilities"). 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.

The Company 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 the first quarter of 2018, the Company borrowed $10 million and made payments of $8 million under these facilities. The maximum daily amount outstanding at any point in time during the first quarter of 2018 was $90 million. Borrowings on these facilities mature between May 7, 2018 and December 18, 2018 and are included within Current Debt on the May 5, 2018 Consolidated Balance Sheet.

The Company also maintains a revolving facility that is guaranteed by L Brands, Inc. and the Guarantors 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 the first quarter of 2018, the Company borrowed $11 million under this facility. These borrowings, which mature on May 11, 2022, are included within Long-term Debt on the May 5, 2018 Consolidated Balance Sheet.