Long-term Debt and Borrowing Facilities

3 Months Ended

May 01, 2021

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

Long-term Debt and Borrowing Facilities

The following table provides the Company’s outstanding debt balance, net of unamortized debt issuance costs and discounts, as of May 1, 2021, January 30, 2021 and May 2, 2020:


	May 1, 2021		January 30, 2021		May 2, 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	—		—		107
Total Senior Secured Debt with Subsidiary Guarantee	$	—	$	740	$	107
Senior Debt with Subsidiary Guarantee
$1 billion, 6.625% Fixed Interest Rate Notes due April 2021 (“2021 Notes”)	$	—	$	—	$	450
$1 billion, 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		319		498
$500 million, 9.375% Fixed Interest Rate Notes due July 2025 ("2025 Notes")	493		493		—
$297 million, 6.694% Fixed Interest Rate Notes due January 2027 (“2027 Notes”)	279		278		276
$500 million, 5.250% Fixed Interest Rate Notes due February 2028 (“2028 Notes”)	497		497		496
$500 million, 7.500% Fixed Interest Rate Notes due June 2029 ("2029 Notes")	488		488		487
$1 billion, 6.625% Fixed Interest Rate Notes due October 2030 ("2030 Notes")	989		988		—
$1 billion, 6.875% Fixed Interest Rate Notes due November 2035 (“2035 Notes”)	991		991		991
$700 million, 6.750% Fixed Interest Rate Notes due July 2036 (“2036 Notes”)	694		694		693
Total Senior Debt with Subsidiary Guarantee	$	4,750	$	5,032	$	4,749
Senior Debt
$350 million, 6.950% Fixed Interest Rate Debentures due March 2033 (“2033 Notes”)	$	348	$	348	$	348
$247 million, 7.600% Fixed Interest Rate Notes due July 2037 (“2037 Notes”)	246		246		298

Total Senior Debt	$	594	$	594	$	646
Total	$	5,344	$	6,366	$	5,502
Current Debt	—		—		(468)
Total Long-term Debt, Net of Current Portion	$	5,344	$	6,366	$	5,034

Repurchases of Notes

In April 2021, the Company completed a make whole call to repurchase the remaining $285 million of outstanding 2022 Notes and the $750 million of outstanding 2025 Secured Notes. The Company recognized a pre-tax loss related to this extinguishment of debt of $105 million (after-tax loss of $80 million), which includes the write-offs of unamortized issuance costs. This loss is included in Other Income (Loss) in the 2021 Consolidated Statement of Income.

Asset-Backed Revolving Credit Facility

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

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 May 1,

2021, the Company's borrowing base was $1.025 billion and 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 May 1, 2021 that reduced its availability under the ABL Facility.

As of May 1, 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 the London Interbank Offered Rate plus 1.75% per annum. The interest rate on outstanding Canadian dollar-denominated borrowings was the Canadian Dollar Offered Rate 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 May 1, 2021, the Company was not required to maintain this ratio.

As of May 1, 2021, there were no borrowings outstanding under the ABL Facility.

During the first quarter of 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. This borrowing was repaid during the first quarter of 2020 upon the completion of the Amendment.

Foreign Facilities

Certain of the Company's China subsidiaries utilize revolving and term loan bank facilities to support their operations ("Foreign Facilities"). 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. These facilities are guaranteed by the Company and certain of the Company's 100% owned subsidiaries. As of May 1, 2021, the Foreign Facilities allow for borrowings and letters of credit up to $30 million, and there were no borrowings outstanding.

The Company placed cash on deposit with certain financial institutions as collateral for their lending commitments under the Foreign Facilities. The amount of collateral required was dependent upon the aggregate lending commitments. These deposits, totaling $30 million, are recorded in Other Current Assets on the May 1, 2021 Consolidated Balance Sheet.