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Debt | 12 Months Ended
--- | ---
Jan. 31, 2020
Debt Disclosure [Abstract] |
Debt | NOTE 3. DEBT Debt Arrangements On November 16, 2017, the Company entered into the ABL Facility, which provides for maximum borrowings of $175.0 million for the Company, subject to a borrowing base. Subsequent to Fiscal 2019 and before the filing of this Annual Report on Form 10-K for Fiscal 2019, the Company increased capacity under the ABL Facility by $25 million, so that maximum borrowings are $200 million. The ABL Facility has a letter of credit sub-limit of $70.0 million and will mature no later than November 16, 2022, subject to customary extension provisions provided for therein. The ABL Facility is available for working capital and other general corporate purposes, and was undrawn, other than for letters of credit, as of January 31, 2020. Upon entering into the ABL Facility, the Company incurred $1.5 million in debt origination fees. The fees were capitalized as debt issuance costs and are being amortized as an adjustment to Interest expense over the remaining life of the Debt Facilities. On April 4, 2014, Lands' End entered into the Term Loan Facility of $515.0 million, the proceeds of which were used to pay a dividend of $500.0 million to a subsidiary of Sears Holdings Corporation immediately prior to the Separation and to pay fees and expenses associated with a prior debt arrangement and the Term Loan Facility of approximately $11.4 million. The remaining proceeds were used for general corporate purposes. The fees were capitalized as debt issuance costs and are being amortized as an adjustment to Interest expense over the remaining life of the Debt Facilities. In First Quarter 2019, Lands’ End made a $100 million voluntary prepayment on the Term Loan from excess cash on hand. The Company's debt consisted of the following:
|  | January 31, 2020 |  |  | February 1, 2019 |
(in thousands) |  | Amount |  |  | Rate |  |  | Amount |  |  | Rate |
Term Loan Facility, maturing April 4, 2021 |  | $ | 385,388 |  |  |  | 5.05 | % |  | $ | 490,538 |  |  |  | 5.77 | %
ABL Facility, maturing November 16, 2022 |  |  | — |  |  |  | — | % |  |  | — |  |  |  | — | %
|  |  | 385,388 |  |  |  |  |  |  |  | 490,538 |  |  |  |  |
Less: current maturities |  |  | 5,150 |  |  |  |  |  |  |  | 5,150 |  |  |  |  |
Less: unamortized debt issuance costs |  |  | 1,581 |  |  |  |  |  |  |  | 2,935 |  |  |  |  |
Long-term debt, net |  | $ | 378,657 |  |  |  |  |  |  | $ | 482,453 |  |  |  |  |
The following table summarizes the Company's borrowing availability under the ABL Facility:
(in thousands) |  | January 31, 2020 |  |  | February 1, 2019 |
ABL Facility maximum borrowing |  | $ | 175,000 |  |  | $ | 175,000 |
Outstanding letters of credit |  |  | 23,299 |  |  |  | 21,111 |
Borrowing availability under ABL |  | $ | 151,701 |  |  | $ | 153,889 |
Interest; Fees The interest rates per annum applicable to the loans under the Debt Facilities are based on a fluctuating rate of interest measured by reference to, at the borrowers' election, either (i) an adjusted LIBOR plus a borrowing margin, or (ii) an alternative base rate plus a borrowing margin. The borrowing margin is fixed for the Term Loan Facility at 3.25% in the case of LIBOR loans and 2.25% in the case of base rate loans. For the Term Loan Facility, LIBOR is subject to a 1% interest rate floor. The borrowing margin for the ABL Facility is subject to adjustment based on the average excess availability under the ABL Facility for the preceding fiscal quarter. LIBOR borrowings will range from 1.25% to 1.75% for the ABL Facility. Base rate borrowings will range from 0.50% to 1.00% for the ABL Facility. Customary agency fees are payable in respect of the Debt Facilities. The ABL Facility fees also include (i) commitment fees in an amount equal to 0.25% of the daily unused portions of the ABL Facility, and (ii) customary letter of credit fees. During Third Quarter Fiscal 2019 and Fourth Quarter Fiscal 2019 the Company had maximum borrowings of $83.3 million on the ABL Facility. These borrowings were paid in full during Fourth Quarter Fiscal 2019. Amortization and Prepayments The Term Loan Facility amortizes at a rate equal to 1% per annum, and is subject to mandatory prepayment in an amount equal to a percentage of the borrower's excess cash flows (as defined in the Term Loan Facility) in each fiscal year, ranging from 0% to 50% depending on Lands' End's secured leverage ratio, and the proceeds from certain asset sales and casualty events. Based on Fiscal 2019 results and in accordance with the Term Loan Facility, no prepayments were required. The Company's aggregate scheduled maturities of the Term Loan Facility as of January 31, 2020 are as follows:
(in thousands) |  |  |  |
Less than 1 year |  | $ | 5,150 |
1 - 2 years |  |  | 380,238 |
2 - 3 years |  |  | — |
3 - 4 years |  |  | — |
4 - 5 years |  |  | — |
|  | $ | 385,388 |
Guarantees; Security All domestic obligations under the Debt Facilities are unconditionally guaranteed by Lands' End, Inc. and, subject to certain exceptions, each of its existing and future direct and indirect wholly-owned domestic subsidiaries. The ABL Facility is secured by a first priority security interest in certain working capital of the borrowers and guarantors consisting primarily of accounts receivable and inventory. The Term Loan Facility is secured by a second priority security interest in the same collateral, with certain exceptions. The Term Loan Facility also is secured by a first priority security interest in certain property and assets of the borrowers and guarantors, including certain fixed assets and stock of subsidiaries. The ABL Facility is secured by a second priority security interest in the same collateral. Representations and Warranties; Covenants Subject to specified exceptions, the Debt Facilities contain various representations and warranties and restrictive covenants that, among other things, restrict the ability of Lands' End and its subsidiaries to incur indebtedness (including guarantees), grant liens, make investments, make dividends or distributions with respect to capital stock, make prepayments on other indebtedness, engage in mergers or change the nature of their business. In addition, if excess availability under the ABL Facility falls below the greater of 10% of the loan cap amount or $15.0 million, Lands' End will be required to comply with a minimum fixed charge coverage ratio of 1.0 to 1.0. The Debt Facilities do not otherwise contain financial maintenance covenants. The Company was in compliance with all financial covenants related to the Debt Facilities as of January 31, 2020. The Debt Facilities contain certain affirmative covenants, including reporting requirements such as delivery of financial statements, certificates and notices of certain events, maintaining insurance, and providing additional guarantees and collateral in certain circumstances. Events of Default The Debt Facilities include customary events of default including non-payment of principal, interest or fees, violation of covenants, inaccuracy of representations or warranties, cross defaults related to certain other material indebtedness, bankruptcy and insolvency events, invalidity or impairment of guarantees or security interests, and material judgments and change of control.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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