Long-term Debt and Borrowing Facilities

3 Months Ended

May 04, 2024

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 May 4, 2024, February 3, 2024 and April 29, 2023:


	May 4, 2024		February 3, 2024		April 29, 2023
	(in millions)
Senior Debt with Subsidiary Guarantee

$314 million, 9.375% Fixed Interest Rate Notes due July 2025 (“2025 Notes”)	$	313	$	313	$	312
$297 million, 6.694% Fixed Interest Rate Notes due January 2027 (“2027 Notes”)	287		287		284
$451 million, 5.250% Fixed Interest Rate Notes due February 2028 (“2028 Notes”)	450		460		498
$493 million, 7.500% Fixed Interest Rate Notes due June 2029 (“2029 Notes”)	485		492		491
$900 million, 6.625% Fixed Interest Rate Notes due October 2030 (“2030 Notes”)	893		930		990
$806 million, 6.875% Fixed Interest Rate Notes due November 2035 (“2035 Notes”)	800		806		979
$575 million, 6.750% Fixed Interest Rate Notes due July 2036 (“2036 Notes”)	571		608		638
Total Senior Debt with Subsidiary Guarantee	3,799		3,896		4,192
Senior Debt
$284 million, 6.950% Fixed Interest Rate Debentures due March 2033 (“2033 Notes”)	283		293		346
$201 million, 7.600% Fixed Interest Rate Notes due July 2037 (“2037 Notes”)	200		199		243
Total Senior Debt	483		492		589
Total Long-term Debt	$	4,282	$	4,388	$	4,781

Repurchases of Notes

During the first quarter of 2024, the Company repurchased in the open market and extinguished $109 million principal amount of its outstanding senior notes. The aggregate repurchase price for these notes was $110 million, resulting in a pre-tax loss of $1 million, including the write-off of unamortized issuance costs. This loss is included in Other Income in the first quarter of 2024 Consolidated Statement of Income.

During the first quarter of 2023, the Company repurchased in the open market and extinguished $84 million principal amount of its outstanding senior notes. The aggregate repurchase price for these notes was $76 million, resulting in a pre-tax gain of $7 million, including the write-off of unamortized issuance costs. This gain is included in Other Income in the first quarter of 2023 Consolidated Statement of Income. There were $2 million of repurchases reflected in Accounts Payable on the April 29, 2023 Consolidated Balance Sheet.

The following table provides details of the outstanding principal amount of senior notes repurchased and extinguished during the first quarters of 2024 and 2023:


	First Quarter
	2024		2023
	(in millions)
2025 Notes	$	—	$	6
2028 Notes	10		—
2029 Notes	7		—
2030 Notes	38		2
2033 Notes	10		3
2035 Notes	6		14
2036 Notes	38		57
2037 Notes	—		2
Total	$	109	$	84

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.

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 May 4, 2024, the Company’s borrowing base was $656 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 May 4, 2024 that reduced its availability under the ABL Facility. As of May 4, 2024, the Company’s availability under the ABL Facility was $646 million.

As of May 4, 2024, 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 Secured Overnight Financing Rate plus 1.25% and a credit spread adjustment of 0.10% per annum. The interest rate on Canadian dollar-denominated borrowings is presently set to the Canadian Dollar Offered Rate plus 1.25% per annum. Due to the phase-out of the Canadian Dollar Offered Rate, Canadian dollar-denominated borrowings outstanding on or after June 30, 2024 will accrue at the Canadian Prime Rate plus 0.25% 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 May 4, 2024, the Company was not required to maintain this ratio.