Long-term Debt and Borrowing Facilities

9 Months Ended

Oct. 28, 2023

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

Long-term Debt and Borrowing Facility

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


	October 28, 2023		January 28, 2023		October 29, 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”)	286		283		283
$486 million, 5.250% Fixed Interest Rate Notes due February 2028 (“2028 Notes”)	483		498		497
$500 million, 7.500% Fixed Interest Rate Notes due June 2029 (“2029 Notes”)	492		491		490
$958 million, 6.625% Fixed Interest Rate Notes due October 2030 (“2030 Notes”)	950		991		991
$861 million, 6.875% Fixed Interest Rate Notes due November 2035 (“2035 Notes”)	855		993		993
$614 million, 6.750% Fixed Interest Rate Notes due July 2036 (“2036 Notes”)	609		694		694
Total Senior Debt with Subsidiary Guarantee	$	3,987	$	4,267	$	4,265
Senior Debt
$311 million, 6.950% Fixed Interest Rate Debentures due March 2033 (“2033 Notes”)	$	310	$	349	$	349
$201 million, 7.600% Fixed Interest Rate Notes due July 2037 (“2037 Notes”)	200		246		246
Total Senior Debt	510		595		595
Total Long-term Debt	$	4,497	$	4,862	$	4,860

Repurchases of Notes

During the third quarter of and year-to-date 2023, the Company repurchased in the open market and extinguished $174 million and $373 million principal amounts of its outstanding senior notes, respectively. The aggregate repurchase prices for these notes were $161 million and $343 million for the third quarter of and year-to-date 2023, respectively, resulting in pre-tax gains of $12 million and $28 million, net of the write-off of unamortized issuance costs, during the third 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 third quarter of and year-to-date 2023:


	Third Quarter		Year-to-Date
	(in millions)
2025 Notes	$	—	$	6
2028 Notes	14		14
2030 Notes	35		42
2033 Notes	31		39
2035 Notes	78		139
2036 Notes	3		86
2037 Notes	13		47
Total	$	174	$	373

Subsequent to October 28, 2023 through December 1, 2023, the Company repurchased in the open market and extinguished $93 million principal amount of its outstanding senior notes for an aggregate repurchase price of $86 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 October 28, 2023, the Company’s borrowing base was $1.169 billion, 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 October 28, 2023 that reduced its availability under the ABL Facility. As of October 28, 2023, the Company’s availability under the ABL Facility was $740 million.

As of October 28, 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 October 28, 2023, the Company was not required to maintain this ratio.