Long-term Debt and Borrowing Facilities

12 Months Ended

Jan. 29, 2022

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 29, 2022 and January 30, 2021:


	January 29, 2022		January 30, 2021
	(in millions)
Senior Secured Debt with Subsidiary Guarantee
$750 million, 6.875% Fixed Interest Rate Secured Notes due July 2025 ("2025 Secured Notes")	$	—	$	740
Senior Debt with Subsidiary Guarantee

$1 billion, 5.625% Fixed Interest Rate Notes due February 2022 (“2022 Notes”)	—		284
$500 million, 5.625% Fixed Interest Rate Notes due October 2023 (“2023 Notes”)	—		319
$320 million, 9.375% Fixed Interest Rate Notes due July 2025 ("2025 Notes")	316		493
$297 million, 6.694% Fixed Interest Rate Notes due January 2027 ("2027 Notes")	281		278
$500 million, 5.25% Fixed Interest Rate Notes due February 2028 (“2028 Notes”)	497		497
$500 million, 7.50% Fixed Interest Rate Notes due June 2029 ("2029 Notes")	489		488
$1 billion, 6.625% Fixed Interest Rate Notes due October 2030 ("2030 Notes")	990		988
$1 billion, 6.875% Fixed Interest Rate Notes due November 2035 (“2035 Notes”)	992		991
$700 million, 6.75% Fixed Interest Rate Notes due July 2036 (“2036 Notes”)	694		694
Total Senior Debt with Subsidiary Guarantee	$	4,259	$	5,032
Senior Debt
$350 million, 6.95% Fixed Interest Rate Debentures due March 2033 (“2033 Notes”)	$	349	$	348
$247 million, 7.60% Fixed Interest Rate Notes due July 2037 (“2037 Notes”)	246		246
Total Senior Debt	$	595	$	594
Total Long-term Debt	$	4,854	$	6,366

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)
2022	$	—
2023	—
2024	—
2025	320
2026	297
Thereafter	4,298

Cash paid for interest was $354 million in 2021, $415 million in 2020 and $357 million in 2019.

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 Consolidated Balance Sheets.

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 was 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 $738 million, which were net of issuance costs of $12 million.

In June 2020, the Company also issued $500 million of 9.375% senior 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 Consolidated Balance Sheets.

Repurchases of Notes

In September 2021, the Company completed tender offers to purchase $270 million of its outstanding 2023 Notes and $180 million of its outstanding 2025 Notes for an aggregate purchase price of $532 million. Additionally, in October 2021, the Company redeemed the remaining $50 million of its outstanding 2023 Notes for $54 million. The Company recognized a pre-tax loss related to this extinguishment of debt of $89 million (after-tax loss of $68 million), which includes the write-off of unamortized issuance costs. This loss is included in Other Loss in the 2021 Consolidated Statement of Income.

In April 2021, the Company redeemed the remaining $285 million of its outstanding 2022 Notes and the $750 million of its 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-off of unamortized issuance costs. This loss is included in Other Loss in the 2021 Consolidated Statement of Income.

In October 2020, the Company completed tender offers to purchase $576 million of its outstanding 2022 Notes, $180 million of its outstanding 2023 Notes and $53 million of its 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 its 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 the write-off of unamortized issuance costs. This loss is included in Other Loss in the 2020 Consolidated Statement of Income.

In June 2019, the Company completed tender offers to purchase $212 million of its outstanding 2020 Notes, $330 million of its outstanding 2021 Notes and $96 million of its 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 its outstanding 2020 Notes for $130 million. The Company recognized a pre-tax loss on this extinguishment of debt of $40 million (after-tax loss of $30 million), which includes the write-off of unamortized issuance costs. This loss is included in Other Loss in the 2019 Consolidated Statement of Loss.

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 (the "Credit Agreement"). 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 the Credit Agreement. 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 "ABL Facility"), which allows borrowings and letters of credit in U.S. dollars or Canadian dollars. The $950 million borrowing was repaid during the first quarter of 2020 upon completion of the April amendment.

In August 2021, the Company entered into an amendment and restatement (the "Amendment") of the Credit Agreement. The Amendment reduced the aggregate commitments under the ABL Facility to $750 million, reduced the interest rates on outstanding borrowings by 50 basis points, removed the requirement to prepay outstanding amounts under the ABL Facility should the Company's consolidated cash balance exceed $350 million, extended the expiration date from August 2024 to August 2026 and released Victoria's Secret & Co. subsidiaries as guarantors, among other things.

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 is required to repay the outstanding amounts under the ABL Facility to the extent of such excess. As of January 29, 2022, the Company's borrowing base was $495 million and it had no borrowings outstanding under the ABL Facility.

The ABL Facility supports the Company’s letter of credit program. The Company had $16 million of outstanding letters of credit as of January 29, 2022 that reduced its availability under the ABL Facility. As of January 29, 2022, the Company's availability under the ABL Facility was $479 million.

As of January 29, 2022, the ABL Facility fees related to committed and unutilized amounts were 0.25% per annum, and the fees related to outstanding letters of credit were 1.25% per annum. In addition, the interest rate on outstanding U.S. dollar borrowings was London Interbank Offered Rate plus 1.25% per annum. The interest rate on outstanding Canadian dollar-denominated borrowings was Canadian Dollar Offered Rate plus 1.25% 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) $70 million or (2) 10% of the maximum borrowing amount. As of January 29, 2022, the Company was not required to maintain this ratio.