Long-term Debt and Borrowing Facilities

12 Months Ended

Jan. 30, 2021

Long-term Debt, by Current and Noncurrent [Abstract]

The following table provides the Company’s outstanding debt balance, net of unamortized debt issuance costs and discounts, as of January 30, 2021 and February 1, 2020:


	January 30, 2021		February 1, 2020
	(in millions)
Senior Secured Debt with Subsidiary Guarantee
$750 million, 6.875% Fixed Interest Rate Secured Notes due July 2025 ("2025 Secured Notes")	$	740	$	—
Secured Foreign Facilities	—		103
Total Senior Secured Debt with Subsidiary Guarantee	$	740	$	103
Senior Debt with Subsidiary Guarantee
$1 billion, 6.625% Fixed Interest Rate Notes due April 2021 (“2021 Notes”)	$	—	$	450
$285 million, 5.625% Fixed Interest Rate Notes due February 2022 (“2022 Notes”)	284		858
$320 million, 5.625% Fixed Interest Rate Notes due October 2023 (“2023 Notes”)	319		498
$500 million, 9.375% Fixed Interest Rate Notes due July 2025 ("2025 Notes")	493		—
$297 million, 6.694% Fixed Interest Rate Notes due January 2027 ("2027 Notes")	278		276
$500 million, 5.25% Fixed Interest Rate Notes due February 2028 (“2028 Notes”)	497		496
$500 million, 7.50% Fixed Interest Rate Notes due June 2029 ("2029 Notes")	488		487
$1 billion, 6.625% Fixed Interest Rate Notes due October 2030 ("2030 Notes")	988		—
$1 billion, 6.875% Fixed Interest Rate Notes due November 2035 (“2035 Notes”)	991		991
$700 million, 6.75% Fixed Interest Rate Notes due July 2036 (“2036 Notes”)	694		693
Total Senior Debt with Subsidiary Guarantee	$	5,032	$	4,749
Senior Debt
$350 million, 6.95% Fixed Interest Rate Debentures due March 2033 (“2033 Notes”)	$	348	$	348
$247 million, 7.60% Fixed Interest Rate Notes due July 2037 (“2037 Notes”)	246		298
Unsecured Foreign Facilities	—		50
Total Senior Debt	$	594	$	696
Total	$	6,366	$	5,548
Current Debt	—		(61)
Total Long-term Debt, Net of Current Portion	$	6,366	$	5,487

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)
2021	$	—
2022	285
2023	320
2024	—
2025	1,250
Thereafter	$	4,594

Cash paid for interest was $418 million in 2020, $363 million in 2019 and $380 million in 2018.

Issuance of Notes

In September 2020, the Company issued $1 billion of 6.625% senior notes due October 2030. The obligation to pay principal and interest on these notes is jointly and severally guaranteed on a full and unconditional basis by the Company and certain of the Company's 100% owned subsidiaries. The proceeds from the issuance were $988 million, which were net of issuance costs of $12 million. The issuance costs are being amortized through the maturity date and are included within Long-term Debt on the January 30, 2021 Consolidated Balance Sheet.

In June 2020, the Company issued $750 million of 6.875% senior secured notes due July 2025. The obligation to pay principal and interest on these notes is jointly and severally guaranteed on a full and unconditional basis by the Company and certain of

the Company's 100% owned subsidiaries. The 2025 Secured Notes are secured on a first-priority lien basis by substantially all of the assets of the Company and the guarantors, and on a second-priority lien basis by certain collateral securing the asset-backed revolving credit facility, in each case, subject to certain exceptions. The proceeds from the issuance were $738 million, which were net of issuance costs of $12 million. The issuance costs are being amortized through the maturity date and are included within Long-term Debt on the January 30, 2021 Consolidated Balance Sheet.

In June 2020, the Company also issued $500 million of 9.375% notes due in July 2025. The obligation to pay principal and interest on these notes is jointly and severally guaranteed on a full and unconditional basis by the Company and certain of the Company's 100% owned subsidiaries. The proceeds from the issuance were $492 million, which were net of issuance costs of $8 million. The issuance costs are being amortized through the maturity date and are included within Long-term Debt on the January 30, 2021 Consolidated Balance Sheet.

In June 2019, the Company issued $500 million of 7.50% notes due in June 2029. The obligation to pay principal and interest on these notes is jointly and severally guaranteed on a full and unconditional basis by the Company and certain of the Company's 100% owned subsidiaries. The proceeds from the issuance were $486 million, which were net of discounts and issuance costs of $14 million. The discounts and issuance costs are being amortized through the maturity date and are included within Long-term Debt on the Consolidated Balance Sheets.

Repurchases of Notes

In October 2020, the Company settled tender offers to repurchase $576 million of outstanding 2022 Notes, $180 million of outstanding 2023 Notes and $53 million of outstanding 2037 Notes for $844 million. The Company used the proceeds from the 2030 Notes to fund the purchase price of the tender offers. Additionally, utilizing cash on hand, the Company redeemed the remaining $450 million of outstanding 2021 Notes for $463 million. The Company recognized a pre-tax loss related to this extinguishment of debt of $53 million (after-tax loss of $40 million), which includes redemption fees and the write-offs of unamortized issuance costs. This loss is included in Other Income (Loss) in the 2020 Consolidated Statement of Income.

In June 2019, the Company completed the early settlement of tender offers to repurchase $212 million of outstanding 2020 Notes, $330 million of outstanding 2021 Notes and $96 million of outstanding 2022 Notes for $669 million. The Company used the proceeds from the 2029 Notes, together with cash on hand, to fund the purchase price for the tender offers. Additionally, in July 2019, the Company redeemed the remaining $126 million of outstanding 2020 Notes for $130 million. The Company recognized a pre-tax loss on extinguishment of debt of $40 million (after-tax loss of $30 million), which includes redemption fees and the write-off of unamortized issuance costs. This loss is included in Other Income (Loss) in the 2019 Consolidated Statement of Loss.

In March 2021, the Company's Board of Directors authorized a reduction in the Company's debt that will be effected by a make whole call to repurchase the remaining $285 million of outstanding 2022 Notes and the $750 million of outstanding 2025 Secured Notes. This make whole call was issued on March 12, 2021 and the Company anticipates using approximately $1.1 billion in cash to complete the debt repurchase.

Revolving Credit Facility

The Company and certain of the Company's 100% owned subsidiaries guarantee and pledge collateral to secure a revolving credit facility. In April 2020, the Company entered into an amendment and restatement of the Credit Agreement to convert the Company’s credit facility into an asset-backed revolving credit facility. The Amendment maintains the aggregate commitments at $1 billion, and maintains the expiration date in August of 2024. The ABL Facility allows borrowings and letters of credit in U.S. dollars or Canadian dollars.

Availability under the ABL Facility is the lesser of (i) the borrowing base, determined primarily based on the Company's eligible U.S. and Canadian credit card receivables, accounts receivable, inventory and eligible real property, or (ii) the aggregate commitment. If at any time, the outstanding amount under the ABL Facility exceeds the lesser of (i) the borrowing base and (ii) the aggregate commitment, the Company will be required to prepay the outstanding amounts under the ABL Facility to the extent of such excess. In addition, at any time that the Company's consolidated cash balance exceeds $350 million, it will be required to prepay outstanding amounts under the ABL Facility to the extent of such excess. As of January 30, 2021, the Company's borrowing base was $853 million but it was unable to draw upon the ABL Facility as its consolidated cash balance exceeded $350 million.

The ABL Facility supports the Company’s letter of credit program. The Company had $63 million of outstanding letters of credit as of January 30, 2021 that reduced its availability under the ABL Facility.

As of January 30, 2021, the ABL Facility fees related to committed and unutilized amounts were 0.30% per annum, and the fees related to outstanding letters of credit were 1.75% per annum. In addition, the interest rate on outstanding U.S. dollar borrowings was LIBOR plus 1.75% per annum. The interest rate on outstanding Canadian dollar-denominated borrowings was CDOR plus 1.75% per annum.

The ABL Facility requires the Company to maintain a fixed charge coverage ratio of not less than 1.00 to 1.00 during an event of default or any period commencing on any day when specified excess availability is less than the greater of (1) $100 million or (2) 15% of the maximum borrowing amount. As of January 30, 2021, the Company was not required to maintain this ratio.

In March 2020, in an abundance of caution and as a proactive measure in response to the COVID-19 pandemic, the Company elected to borrow $950 million from its revolving facility, which was repaid upon the completion of the Amendment. As of January 30, 2021, there were no borrowings outstanding under the ABL Facility.

Foreign Facilities

Certain of the Company's China subsidiaries utilize revolving and term loan bank facilities to support their operations. The Foreign Facilities allow borrowings in U.S. dollars and Chinese Yuan, and interest rates on outstanding borrowings are based upon the applicable benchmark rate for the currency of each borrowing. Certain of these facilities are guaranteed by the Company and certain of the Company's 100% owned subsidiaries.

As of January 30, 2021, the Secured Foreign Facilities allow for borrowings and letters of credit up to $30 million. During 2020, the Company borrowed $21 million and made payments of $126 million under the Secured Foreign Facilities. As of January 30, 2021, there were no borrowings outstanding under the Secured Foreign Facilities.

During 2020, the Company placed cash on deposit with certain financial institutions as collateral for their lending commitments under the Secured Foreign Facilities. As of January 30, 2021, the amount of collateral required was dependent upon the aggregate lending commitments. These deposits, totaling $30 million, are recorded in Other Assets on the January 30, 2021 Consolidated Balance Sheet.

During 2020, the Company borrowed $13 million and made payments of $63 million under the unsecured Foreign Facilities. During the second quarter of 2020, with no borrowings outstanding, the Company terminated the unsecured Foreign Facilities.