Loans, overdrafts and long-term debt

9 Months Ended

Nov. 02, 2019



(in millions)	November 2, 2019			February 2, 2019			November 3, 2018
Debt:
Senior unsecured notes due 2024, net of unamortized discount	$	147.5		$	399.0		$	399.0
ABL revolving facility	543.0			—			—
FILO term loan facility	100.0			—			—
Senior unsecured term loan	—			294.9			303.9
Revolving credit facility	—			—			282.0
Bank overdrafts	5.0			40.1			4.1
Total debt	$	795.5		$	734.0		$	989.0
Less: Current portion of loans and overdrafts	(5.0		)	(78.8		)	(322.6		)
Less: Unamortized debt issuance costs	(1.7		)	(5.6		)	(6.0		)
Total long-term debt	$	788.8		$	649.6		$	660.4

Revolving credit facility and term loan (the “Credit Facility”)

On September 27, 2019, in connection with the issuance of a new senior secured asset-based credit facility, the Company repaid and terminated the Credit Facility. Refer to the “Asset-based credit facility” section below. The original maturity of the Credit Facility was July 2021. Unamortized debt issuance costs of $2.0 million associated with the Credit Facility were written-off in the 13 and 39 week periods ended November 2, 2019 upon executing the termination of the Credit Facility. This expense was recognized as a cost of

extinguishment of the Credit Facility and was recorded within other non-operating income in the condensed consolidated statements of operations.

Senior unsecured notes due 2024

On May 19, 2014, Signet UK Finance plc (“Signet UK Finance”), a wholly owned subsidiary of the Company, issued $400 million aggregate principal amount of its 4.70% senior unsecured notes due in 2024 (the “Notes”). The Notes were issued under an effective registration statement previously filed with the SEC. The Notes are jointly and severally guaranteed, on a full and unconditional basis, by the Company and by certain of the Company’s wholly owned subsidiaries (such subsidiaries, the “Guarantors”). See Note 21 for additional information.

On September 5, 2019, Signet UK Finance announced the commencement of a tender offer to purchase any and all of its outstanding Notes (the “Tender Offer”). Upon receipt of the requisite consents from Note holders, Signet UK Finance entered into a supplemental indenture which eliminated most of the restrictive covenants and certain default provisions of the indenture. The supplemental indenture became operative on September 27, 2019 upon the Company’s acceptance and payment for the Notes previously validly tendered and not validly withdrawn pursuant to the Tender Offer for an aggregate of $239.6 million, which represented a purchase price of $950.00 per $1,000.00 in principal amount of the Notes validly tendered. The Company recognized a net gain on extinguishment of the validly tendered Notes in the 13 and 39 week periods ended November 2, 2019 of $8.7 million, net of $1.3 million in third party fees and $2.6 million in write-off of unamortized debt issuance costs and original issue discount. This net gain was recorded within other non-operating income in the condensed consolidated statements of operations.

Unamortized debt issuance costs relating to the Notes as of November 2, 2019 was $1.2 million (February 2, 2019 and November 3, 2018: $3.7 million and $3.9 million, respectively). The remaining unamortized debt issuance costs are recorded as a direct deduction from the outstanding liability within the condensed consolidated balance sheets. Amortization relating to debt issuance costs of $0.2 million and $0.5 million was recorded as interest expense in the condensed consolidated statements of operations for the 13 and 39 weeks ended November 2, 2019, respectively ($0.2 million and $0.5 million for the 13 and 39 weeks ended November 3, 2018 respectively).

Asset-based credit facility

On September 27, 2019, the Company entered into a senior secured asset-based credit facility consisting of (i) a revolving credit facility in an aggregate committed amount of $1.5 billion (“ABL Revolving Facility”) and (ii) a first-in last-out term loan facility in an aggregate principal amount of $100.0 million (the “FILO Term Loan Facility” and, together with the ABL Revolving Facility, the “ABL Facility”) pursuant to that certain credit agreement. The ABL Facility will mature on September 27, 2024.

Revolving loans under the ABL Revolving Facility are available in an aggregate amount equal to the lesser of the aggregate ABL revolving commitments and a borrowing base determined based on the value of certain inventory and credit card receivables, subject to specified advance rates and reserves. Indebtedness under the ABL Facility is secured by substantially all of the assets of the Company and its subsidiaries, subject to customary exceptions. Borrowings under the ABL Revolving Facility and the FILO Term Loan Facility, as applicable, bear interest at the Company’s option at either eurocurrency rate plus the applicable margin or a base rate plus the applicable margin, in each case depending on the excess availability under the ABL Revolving Facility. The Company had stand-by letters of credit outstanding of $15.5 million on the ABL Revolving Facility as of November 2, 2019. The Company had available borrowing capacity of $871.2 million on the ABL Revolving Facility as of November 2, 2019.

If the excess availability under the ABL Revolving Facility falls below the threshold specified in the ABL Facility agreement, the Company will be required to maintain a fixed charge coverage ratio of not less than 1.00 to 1.00. The ABL Facility places certain restrictions upon the Company’s ability to, among other things, incur additional indebtedness, pay dividends, grant liens and make certain loans, investments and divestitures. The ABL Facility contains customary events of default (including payment defaults, cross-defaults to certain of our other indebtedness, breach of representations and covenants and change of control). The occurrence of an event of default under the ABL Facility would permit the lenders to accelerate the indebtedness and terminate the ABL Facility.

Debt issuance costs relating to the ABL Facility totaled $9.0 million, of which $8.4 million of these costs were allocated to the ABL Revolving Facility and $0.6 million was allocated to the FILO Term Loan Facility. The remaining unamortized debt issuance costs for the ABL Revolving Facility are recorded within other assets in the condensed consolidated balance sheets and the remaining unamortized debt issuance costs for the FILO Term Loan Facility are recorded as a direct deduction from the outstanding liability within the condensed consolidated balance sheets. Amortization relating to the ABL Facility debt issuance costs of $0.1 million was recorded as interest expense in the condensed consolidated statements of operations for the 13 and 39 weeks ended November 2, 2019.

Other

As of November 2, 2019, February 2, 2019 and November 3, 2018, the Company was in compliance with all debt covenants.