Long-term Debt and Borrowing Facilities

6 Months Ended

Jul. 29, 2023

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

The following table provides the Company’s outstanding long-term debt balance, net of unamortized debt issuance costs and discounts, as of July 29, 2023, January 28, 2023 and July 30, 2022:


	July 29, 2023		January 28, 2023		July 30, 2022
	(in millions)
Senior Debt with Subsidiary Guarantee

$314 million, 9.375% Fixed Interest Rate Notes due July 2025 (“2025 Notes”)	$	312	$	317	$	317
$297 million, 6.694% Fixed Interest Rate Notes due January 2027 (“2027 Notes”)	285		283		282
$500 million, 5.250% Fixed Interest Rate Notes due February 2028 (“2028 Notes”)	498		498		497
$500 million, 7.500% Fixed Interest Rate Notes due June 2029 (“2029 Notes”)	491		491		490
$993 million, 6.625% Fixed Interest Rate Notes due October 2030 (“2030 Notes”)	984		991		990
$939 million, 6.875% Fixed Interest Rate Notes due November 2035 (“2035 Notes”)	933		993		993
$617 million, 6.750% Fixed Interest Rate Notes due July 2036 (“2036 Notes”)	612		694		694
Total Senior Debt with Subsidiary Guarantee	$	4,115	$	4,267	$	4,263
Senior Debt
$341 million, 6.950% Fixed Interest Rate Debentures due March 2033 (“2033 Notes”)	$	340	$	349	$	349
$214 million, 7.600% Fixed Interest Rate Notes due July 2037 (“2037 Notes”)	213		246		246
Total Senior Debt	553		595		595
Total Long-term Debt	$	4,668	$	4,862	$	4,858

Repurchases of Notes

During the second quarter of and year-to-date 2023, the Company repurchased in the open market and extinguished $115 million and $199 million principal amounts of its outstanding senior notes, respectively. The aggregate repurchase prices for these notes were $106 million and $182 million for the second quarter of and year-to-date 2023, respectively, resulting in pre-tax gains of $9 million and $16 million, net of the write-off of unamortized issuance costs, during the second quarter of and year-to-date 2023, respectively. These gains are included in Other Income in the 2023 Consolidated Statements of Income.

The following table provides details of the outstanding principal amount of senior notes repurchased and extinguished during the second quarter of and year-to-date 2023:


	Second Quarter		Year-to-Date
	(in millions)
2025 Notes	$	—	$	6
2030 Notes	5		7
2033 Notes	6		9
2035 Notes	47		61
2036 Notes	26		83
2037 Notes	31		33
Total	$	115	$	199

Subsequent to July 29, 2023 through September 1, 2023, the Company repurchased in the open market and extinguished $30 million principal amount of its outstanding senior notes for an aggregate repurchase price of $29 million.

Asset-backed Revolving Credit Facility

The Company and certain of the Company's 100% owned subsidiaries guarantee and pledge collateral to secure 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 of $750 million and an expiration date in August 2026.

In the second quarter of 2023, the Company amended its ABL Facility to replace the London Interbank Offer Rate (“LIBOR”) based rate with a Secured Overnight Financing Rate (“SOFR”) based rate as the interest rate benchmark on U.S. dollar borrowings. This amendment made no other material changes to the terms of the ABL Facility.

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 July 29, 2023, the Company's borrowing base was $668 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 $10 million of outstanding letters of credit as of July 29, 2023 that reduced its availability under the ABL Facility. As of July 29, 2023, the Company's availability under the ABL Facility was $658 million.

As of July 29, 2023, 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 1.25% per annum. In addition, the interest rate on outstanding U.S. dollar borrowings was the Term SOFR plus 1.25% and a credit spread adjustment of 0.10% per annum. The interest rate on outstanding Canadian dollar-denominated borrowings was the 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 (i) $70 million or (ii) 10% of the maximum borrowing amount. As of July 29, 2023, the Company was not required to maintain this ratio.